The Cape Fear Capital Connection on MyTalker Radio. WMYT fm Monday, October 20, 2014 Curtis Wright and Thomas Vass Discuss The Effect The SEC Confusion on Implementing Crowdfunding Rules Is Having on Private Capital Markets

Recap From Last Week: Invitation to U. S. Representative Patrick McHenry To Appear On Show We invited Representative McHenry to come on the show and explain what Congress is doing about the SEC.

The SEC Has Failed To Act On Title III, For Non-Accredited Investors The U. S. Congress gave the SEC one year to implement Title III. The SEC has failed to act, and the proposed rules make it nearly impossible for companies to sell securities to non- accredited investors.

The SEC Is About To Make It Harder For Accredited Investors Under Title II Everyone out of the Pool! IAC Makes Recommendations Which Would Significantly Decrease The Pool of Available Accredited Investors, CrowdFund Insider, October 10, 2014 By Anthony Zeoli, (who we interviewed last week about New Mexico)

Representative McHenry Declined Our Invitation Could not be with us Monday at 7am. Could not find a time any future Monday to be with us. Said they would continue to look at their calendar and would let us know if a Monday at 7am became available.

One Year After Title II And Equity Crowdfunding by Kay Koplovitz Kay Koplovitz A total of 534 out of 3,361 companies successfully hit their equity crowdfunding target in year one in Title II Accredited Investor Crowdfunding. 2,824 that did not get funded According to Crowdnetic, $217.7 million equity capital was raised, which averages $407,685 per company.Crowdnetic

Very Small Amounts Of Capital Crowdfunder's average deal size is $1.6 million, most of them in the Seed and Series A rounds, and the range raised is generally $500,000 to $3 million. As reported by Crowdfunder, there are an estimated 9 million accredited investors in the US.

Same States as Venture Capital Model

Much More Equity Than Debt

SEC About to Make Intrastate Crowdfunding Impossibe As Joe Wallin, the father of the Washington State intrastate exemption, pointed out when discussing the effects C&DI would have on the State’s exemption: ““The immediate impact of this informal April 2014 SEC Staff ruling is to nullify one of the more important features of the Washington statute … the ability of an issuer to communicate with the public via the Internet to call attention to its intrastate crowdfunded offering”

Let’s Review What The SEC is Doing Will not issue Title III Non-accredited rules. Going to make Title II Accredited Investor more difficult. Going to prohibit state-level crowdfunding WHY?

MyTalker Radio and The Cape Fear Capital Connection Have Offered A Better Model of Regional Innovation For The Cape Fear Economy Generation 1 Deal Mapping for Ideas Deal Creation Deal funding Deal Exits Profit Re-investment in Regional Companies Generation 2 Deal Mapping Deal Creation Deal funding Deal Exits