Much has been written about equity crowdfunding over the years, a lot by Traklight. We even have a trademarked slogan, Practice Safe Crowdfunding® and a five part series about the topic. In the past year or so, we have not written much because the final rules were trapped with the Securities Exchange Commission (SEC). But all that changes in sixty days on May 16, 2016 when federal equity crowdfunding funding  (Title III) becomes legal. 

The final rules allow for up to $1 million capital raise from non-accredited investors, more commonly known as the crowd. The JOBS act will turn four years old on April 5th 2016 and in the meantime more than thirty states have passed rules that allow for intrastate crowdfunding.

Entrepreneurs (called Issuers in the final rules) have to get started today. All campaigns have to be conducted online on a funding portal. It will not be as simple as setting up an Indiegogo or Kickstarter campaign.

A Form C needs to be filed online with Edgar – so turning to the portal or Traklight’s partner, iDislose for help is a good idea if you are not familiar with the system. However, you need to start preparing for the list of items as business owners at the same time you start in on the crowdfunding campaigning steps, like building up your social media:

  • Get an entity – you need to incorporate;
  • Financial Statements – for under $100K raise you will need to certify these financials;
  • CPA Review of Financial Statements – for over $100K raise you will need an independent review by a CPA
  • Update all your director, officer, and business plan information; and
  • Identify and protect your intellectual property BEFORE you publish that business plan and details about your product or service.

Read more about the details  in an upcoming Forbes post and learn more about crowdfunding using our free business assessment.

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