The Traklight Blog

Explore the world of intangible assets and IP with guest blogs, business owner interviews, and more.

Forbes Update: Equity Crowdfunding Still in a Holding Pattern

 *This Forbes update will be postponed. Check back later for the updated link or follow Mary on Forbes to be notified of her newest posts. Sorry for any inconvenience!* 

Last week's Traklight on Forbes series shared an interview with Unified Patents and what they're doing to stop Non-Practicing Entities from hurting your business. Check back every Thursday for more content. Thanks for reading!


Mary has spoken in the past about the Jumpstart Our Business Startups (JOBS) Act. But this time, she interviews the executives of Crowdfund Intermediary Regulatory Association (CFIRA), two months before the end of 2014 and just in time for the annual Securities and Exchange Commission (SEC) Government-Business Forum on Small Business Capital Formation and a public CFIRA meeting.

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"I'm In": Why Entrepreneurs Use Patents

Did you catch last night's season premeire of Shark Tank? If you have been busy working out the details of your innovation, you may not have had the opportunity to tune into this popular TV show on which entrepreneurs seek investments from five self-made multi-millionaires and billionaires.

If you have watched the TV show, then you know that once the business financials are highlighted, the next question the Sharks ask is, “Do you have a patent?” You also know that if there is no patent, or even a patent pending, each Shark immediately responds by saying, “I’m out.”

Let’s look at two essential reasons for the Sharks’ response, and how entrepreneurs benefit from patents: as a way to suppress potential competition and to get investors to say, “I’m in.”

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Crowdfunding Discussion on Arizona Horizon Eight

In this segment, Mary describes the difference between rewards-based and equity crowdfunding. Though equity crowdfunding is not yet legal, the JOBS Act of 2012 will have more to say about the rules once those are released. Many states in the US already have their own specific rules for crowdfunding in general. As always, Traklight encourages startups to practice safe crowdfunding and protect their intellectual property before broadcasting it on a crowdfunding platform. Check out the video below for the clip, beginning at 16:00.

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Learn How to Crowdfund (and More) at the 3rd Annual GCCB

The word “bootcamp” doesn’t exactly conjure positive thoughts in the minds of most people. It’s associated with long days filled with exhausting exercises, followed by sleepless nights preparing for the next day. As pointless as it may seem while you’re going through it (and trust me, it does seem pointless), the ultimate point of bootcamp is to give you the knowledge and skills you need to succeed in future endeavors, whether that be a stint in the military or getting your business prepared for crowdfunding.

So what lessons can you hope to learn from the 3rd Annual Global Crowdfunding Convention and Bootcamp (GCCB)? Read on. . . 

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Forbes Update: Crowdfunding and IP Tips from an Entrepreneurial Attorney

Last week's Traklight on Forbes series mentioned six female innovators who are shaking up the legal tech scene. Check back every week for more content. Thanks for reading!


This week, Mary interviews Michael S. Melfi, Founder and entrepreneurial attorney of the intellectual property (IP) law firm Melfi & Associates PC, and General Counsel for the new crowdfunding platform Funderbuilt. Michael provides startups, entrepreneurs, and business owners with some great advice on the important relationship between smart crowdfunding and IP. Here's a short snippet to peak your interest:

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Attend SXSW Mentoring. Get a PSCF shirt.

As a session at last year's SXSW V2V event in Las Vegas, NV, Traklight CEO Mary Juetten asked her audience of entrepreneurs if any of them thought they didn't have Intellectual Property (IP). Of course, if you have been reading the Traklight blog and understand that 100% of businesses have IP, then you see that this question was a set up. No one should answer yes. But just as Mary was about to commend everyone and tell them they were correct for not raising their hands, there was one man who shyly raised his hand. 

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Traklight to Sponsor LAUNCH Festival 2014

In three days time, two Trakers - our Founder and CEO, Mary Juetten; and our COO Jill Howard Allen - will represent us in San Francisco at the 7th annual LAUNCH Festival 2014. The LAUNCH Festival, founded by serial entrepreneur and journalist Jason Calacanis in 2010, has been described as "the best place to launch your company, raise money, and learn about building great startups. We are proud to sponsor this annual event in which 40 new companies launch on stage in front of more than 8,000 people. Additionally, we are very excited to share that Mary will host a workshop on good practices for safe crowdfunding (we'll see you on the Main Stage at 1pm!).

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Step-by-Step Crowdfunding: How to Turn Any Project into a Smashing Success

This is a guest blog written by Michael Ibberson, a writer based out of Toronto, Ontario. He covers the most up to date news and information in regards to crowdfunding for the CrowdClan blog.


It goes without saying that crowdfunding offers an amazing opportunity for innovators, entrepreneurs, and artists to raise funds for a project online. With that said, crowdfunding is by no means free money; in order to be successful, a lot of work must go into the campaign. For those interested in crowdfunding but have no idea where to begin, this is the post for you!

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Traklight’s Practice Safe Crowdfunding Summer Tour 2013

pscfJust under five weeks on the road, with a worcation* in Kelowna, British Columbia jammed into week number two, and only one rain shower when I crossed the Colorado River back into Arizona.  Intern Jake Hoekstra and I traveled from Phoenix to Vancouver, BC in five days and I returned solo (it was planned that way!), splitting the return drive over six days.

Armed with dozens of Practice Safe CrowdfundingTM t-shirts, we met with entrepreneurs, attorneys, customers, and partners in Santa Monica, LA, Santa Cruz, San Francisco, Palo Alto, San Jose, Seattle, Everett, Vancouver, BC  and more on our PSCF tour.


Equity Crowdfunding is still a bit of a secret
While wearing my PSCF t-shirt, someone would inevitably ask, “What is Crowdfunding?”  I would immediately ask whether they had heard of Kickstarter or Indiegogo.  If no, then I knew I would have to haul out the long version available here <more on Indiegogo here>. If yes, then I would ask if they knew about JOBS Act and equity crowdfunding and take it from there <more about that here>. 

On average, not counting Bret and Ben from Indiegogo for obvious reasons, I estimate that about half the people knew about rewards-based crowdfunding but less than a quarter had even heard about equity crowdfunding.

Practice Safe Crowdfunding is achieved with these 5 easy steps:
  1. Identify your Intellectual Property (IP)
  2. Protect that IP
  3. Pick the right crowdfunding platform for your needs
  4. Build your social capital (this is not an overnight step!)
  5. Create the pitch (be very careful not to infringe)
Waze = cool app for avoiding traffic (love the crowdsourcing)
Crowdsourcing information is different from Crowdfunding.   The Waze app accesses location, speed and other information from your phone but in addition you can earn points for reporting traffic, cars on the side of the road, police speed traps and so on.

The estimated time of arrival and traffic routes are superior to other systems and winning points for miles and updates brings out the competitor in even the mildest mannered Traker. Plus this type of gamification gave us the idea for a cool twist on PSCF so stay tuned.

P.S.  Waze does not work on Blackberry so well plus no audio and as solo driver on the way back, had to resort to pulling off the side of the road to use it :(

Safe Driving: Books on CDs put me to sleep
Solo on the way back, I thought I would use some of the CDs that we won in the SUCESSS contest to pass the time. Not good, I was nodding off because the voice was oddly soothing.

However phone calls, using the hands-free option, were invigorating and kept me entertained for miles. Although by day six, few Trakers were taking my calls, they did a fabulous job of talking me down the coast. The only challenge was coming up with a great idea and not being able to write it down (or ask the co-pilot because he flew home!).  So I would beg whoever was on the phone with me to send me an email or text.

Rear view Mirrors are vastly under-utilized
Not really on the PSCF topic but I have to say that I could have paid for the gas and maybe the hotels if I had a dollar for each person that did not see me in their rear view mirror for miles and miles. I am thinking that maybe next year we should have Practice Safe Crowdfunding bumper stickers based on the number of tailgaters I experienced!

Nothing beats face-to -face meetings
In addition to spending time with new Trakers like Michael and Sam and some of my favorite (related to me) Trakers, Philip and Jake; meeting people for the first time in person was invaluable. It is a cliché that business is about relationships, but it is the truth. Relying on Skype or phone or, even worse, email for a relationship is the equivalent to the long distance relationship, it is not sustainable.

It is well worth the hours of planning to piece these meetings together to sit across from someone and chat about not just business.

Highlights included touring the Indiegogo's headquarters in San Francisco, Stanford University, Startup Weekend in Seattle, watching Trakers Michael and Jake on the rides in Santa Cruz, listening to Wendy Lea at DocStoc’s entrepreneur series in Santa Monica, meeting fellow entrepreneurs in Vancouver thanks to Joy Case from AnIdeaNation.  We truly do build the resources in the IP Cloud on our SUCCEED page through relationships.

Stay tuned for Part II, where I turn in my car keys for a series of boarding passes.

* worcation is defined as working before everyone gets up, limiting calls or Skype to one per day and development/website testing is done at the crack of dawn or after dinner until it’s done. Very fun activities are from mid morning to early evening.
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Crowdfunding And Public Solicitation

Traklight_SecuritiesThe Securities and Exchange Commission (SEC) finally lifted its 80 year restriction on advertising for Regulation D offerings. What does this mean? Unregistered companies trying to raise capital that were previously banned from seeking funding from the public at large through public solicitation can do so now in the form of equity crowd funding.

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Spotlight on Indiegogo

For those of you oblivious to the concept of crowd funding, it is steadily growing as a model of financing small businesses and other endeavours. Indiegogo as a crowdfunding website makes use of social networking platforms to give easy accessibility to a vast pool of investors who typically put up small amounts into projects that appeal to them. According to Slava Rubin, who co-founded Indiegogo with Danae Ringelmann and Eric Schell in 2008, one does not need a ‘right’ time or detailed business plan to pursue something one is deeply passionate about. The website has given various ventures – including films, charities, businesses and recordings – a means to raise money and attract potential customers from a global audience.

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Developing Winning Crowdfunding Pitches

Crowdfunding. Everyone’s doing it, All I have to do is make a video asking for money, right? Wrong. Turns out there is a lot of preparation necessary to create a successful crowdfunding pitch. Of course, you start by following the steps to Practice Safe Crowdfunding –
1. Identify your intellectual property
2. Protect your intellectual property
3. Choose a platform
4. Raise social capital

Then it’s time to Create Your Pitch! Where do you start? What do the successful campaigns look like? What elements are in their pitches? What do the rewards look like? How have they connected to their donors/funders?

Miss our webinar? No problem. Learn from Traklight’s Megan and Jill as they review a successful and a not so successful campaign. Discover how successful campaigns create their pitch and choose the right rewards to reach their funding goals here.
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Traklight featured in The Soho Loft Webinar Series

The Soho Loft and Efactor present a series of webinars by the the Top 100 Crowdfunders. Read more about Traklight's CEO being featured at Meet the Top 100 Crowdfunders. Tips on business planning for crowdfunding are included in the reprinted blog below.
Equity crowdfunding under the JOBS Act (Jumpstart Our Business Startups) is not yet legal but reward, donation, or perk based crowdfunding, think Kickstarter, Indiegogo or RocketHub, have been very active over the past couple of years. 

Raising money either as a donation to a cause, by offering a reward in the form of a special event, or early access to a product are both common and legal forms of crowdfunding. The Pebble watch campaign raised over $10 million dollars but that was an anomaly in terms of dollars raised. The watch was the reward and the funders financed its production.

In contrast, the “reward” under equity crowdfunding will be an ownership interest in the business. Equity shares will be issued instead of a watch or a donation and the person will become a shareholder. Under equity crowdfunding, there will be limits on the amount that the average person can invest based. However satisfying the income thresholds for accredited investors, the lowest being $250,000, will not be required.

Equity crowdfunding is not legal until the SEC promulgates the rules. In the meantime, companies interested in crowdfunding should start preparing now. Many of the requirements are good practices for any business and necessary for accessing capital, regardless of the source.

The JOBS Act outlines some items that will be necessary to pursue equity crowdfunding(1):

1. Company must be registered and incorporated in the US;
2. Names of the Directors, Officers, and any Shareholder with more than 20% of ownership;
3. Business Description and Business Plan;
4. Financial Statements with varying levels of attestation depending on the amount of money being raised;
5. Prior year Tax Returns;
6. Goal for Capital Raise and Target Dates (progress updates are also required);
7. Planned Use of Capital Raised;
8. Share Price and methodology for determining share prices;
9. Detailed information on the Ownership and Capital Structure, including terms for the shares being offered under crowdfunding; and
10. Terms of any other outstanding shares and the differences between those outstanding and those being offered.

It’s a long list and certainly not exhaustive because the SEC may add more requirements to protect investors and the public. 


Business Plan Requirement

First, having a current business plan is important to any business but much of the current startup or small business advice is to create a business model instead. This allows the flexibility to pivot. Some examples include the Business Model Canvas(2) and the Lean Canvas.(3) 

Alexander Osterwalder’s book Business Model Ontology outlined the Business Model Canvas for both startups and businesses. The Canvas is now available in an online format. Ash Maurya has created a derivative called the Lean Canvas, which is for early stage startups or inventions with a problem/solution focus. While these are excellent online tools, business plans for equity crowdfunding purposes will likely be much more involved. 

Second, anyone who has done a full-blown business plan realizes that often the plan is out of date shortly after completion. The exercise of discussing and modeling the business is often where the value lies for the company. However, for crowdfunding that business plan will have to be available to potential investors and must be up to date. Online business plans rather than models will be the way to proceed so that the contents can easily be updated. Check out the Crowfundingroadmap site for an example of the virtual business plan.

Finally, the contents of the business plan will be displayed on the Internet. This means that you should not disclose your secret sauce or too much information on your products or process to imperil your Intellectual Property rights . Although most entrepreneurs know that success lies in the team and execution, it is good business sense to protect your ideas appropriately and avoid accidentally disclosing too much. 

The list above is daunting, especially for those who have used rewards based crowdfunding. However, with proper planning, companies can be ready for equity crowdfunding as they advance their businesses.

(1) Thank you to www.crowdfundingroadmap.com for the minimum requirements list.
(2) Visit the website for more information on http://www.businessmodelgeneration.com/canvas.
(3) http://canvanizer.com/how-to-use/business-model-canvas-vs-lean-canvas includes all the tools.

Originally published at Return on Change.
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