Crowdfunding Professor Bohle Students: Vincent Naidoo, Yvonne Tan, Timothy Dang

Agenda Review financial disclosure proposals Review parties involved in equity crowdfunding transaction Lesson: Title IV/Regulation A+

Equity Crowdfunding The transaction between investor and issuer Exchange securities for capital Expected Return on Investment

SEC’s Financial Disclosure Proposal Issuers offering $100,000 or less Issuers offering more than $100,000, but not more than $500,000 Issuers offering more than $500,000

Texas’s Proposal and SEC’s Proposal Require no audited financials No annual filing requirements Non-accredited investors can contribute up to $5,000

Issuer Includes any person who is a director or partner of the issuer that offers or sells securities in a crowdfunding exempt offering Could also be principal executive officer(s), principal financial officer and controller accounting officer of the issuer

Intermediaries Crowdfunding Platforms Title III of the JOBS Act requires that crowdfunding transactions take place through an SEC-registered intermediary Broker-dealer or a Funding Portal Provide investors with educational materials on how the offering process works and the risks involved with investing in crowdfunding securities.

Investors Accredited Bank Insurance company Individual with income > $200,000 Joint income with spouse > $300,000 Non-Accredited Investor that does not meet the net worth requirements for an accredited investor.

Equity Crowdfunding Title IV of the JOBS Act Enables smaller companies to sell up to $50 million of securities Regulation A+ (formerly A) now allows non-accredited investors Provides an effective way of raising capital while protecting investors

Equity Crowdfunding Regulation A+ Tier 1 – for offerings up to $20 million Tier 2 – for offerings up to $50 million Requirement to provide audited financial statements Limits non-accredited investors to 10% of annual income or net worth

Questions?