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New Rules Allow Early Adopters to Become Early Investors

New Rules Allow Early Adopters to Become Early Investors | Startups | Scoop.it
Were you one of the first to identify Uber as a game changer?  What about being one of the first to use Amazon or Google in the early days? If you had..

Were you one of the first to identify Uber as a game changer?  What about being one of the first to use Amazon or Google in the early days?

If you had invested in Uber (now valued at $40B) in 2011, you would currently be sitting on a 600x return. Unfortunately, unless you were already very wealthy, securities laws would have prevented you from being able to invest in the these companies.

Early adopters have historically been prevented from crossing the threshold from customer to investor. However, a fundamental shift in the relationship between consumers and companies has been set in motion by new SEC regulations set to go into effect on June 19th.

Most early adopters interested in supporting private companies have been limited to rewards-based crowdfunding. This type of crowdfunding has proven to be a poor substitute for true early stage investing. Rewards-based crowdfunding websites such as Kickstarter allow individuals to pre-order products or donate towards something that they want to exist in the world. These “backers” do not get shares or equity in the company. Although these backers take on significant risk, they do not get any significant upside.

The story of Oculus VR is apt. Nearly two years after its celebrated rewards-based crowdfunding raise, Oculus was acquired by Facebook for $2B. Oculus’ early Kickstarter backers felt angered and betrayed. Though they had a sense of ownership in the company, they reaped no benefits from the transaction. Meanwhile, the institutional and accredited investors who invested in Oculus after the Kickstarter campaign (and in large part because of the Kickstarter campaign) made a large amount of money in a short period of time. $300 in equity in Oculus at the time of the Kickstarter campaign would have been worth approximately $45,000, a 145x return.

Successful technology startups owe it to their early adopters to let them participate in the company’s financial success.  These are the people who realized the company’s potential before the public and provided the momentum to turn that potential into a reality. Read more: click on image or title.




Need funding?

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Marc Kneepkens's curator insight, June 21, 11:24 AM

Early adopters are part of the success of a startup and should be rewarded for their input and commitment. This article digests the new opportunities.

Richard Platt's curator insight, June 21, 1:01 PM

Here are some of the key takeaways:

  • EMV cards are being rolled out with an embedded microchip for added security. The microchip carries out real-time risk assessments on a person’s card purchase activity based on the card user’s profile. The chip also generates dynamic cryptograms when the card is inserted into a payment terminal. Because these cryptograms change with every purchase, it makes it difficult for fraudsters to make counterfeit cards that can be used for in-store transactions.
  • To bolster security throughout the payments chain encryption of payments data is being widely implemented. Encryption degrades valuable data by using an algorithm to translate card numbers into new values. This makes it difficult for fraudsters to harvest the payments data for use in future transactions.
  • Point-to-point encryption is the most tightly defined form of payments encryption. In this scheme, sensitive payment data is encrypted from the point of capture at the payments terminal all the way through to the gateway or acquirer. This makes it much more difficult for fraudsters to harvest usable data from transactions in stores and online. 
  • Tokenization increases the security of transactions made online and in stores. Tokenization schemes assign a random value to payment data, making it effectively impossible for hackers to access the sensitive data from the token itself. Tokens are often “multiuse,” meaning merchants don’t have to force consumers to re-enter their payment details. Apple Pay uses an emerging form of tokenization. 
  • 3D Secure is an imperfect answer to user authentication online. One difficulty in fighting online fraud is that it is hard to tell whether the person using card data is actually the cardholder. 3D Secure adds a level of user authentication by requiring the customer to enter a passcode or biometric data in addition to payment data to complete a transaction online. Merchants who implement 3D Secure risk higher shopping-cart abandonment.
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Tips for Getting Started on Your Startup

Tips for Getting Started on Your Startup | Startups | Scoop.it
Budding entrepreneurs beware: advice is everywhere and it's easy to fall down a rabbit hole of research rather than getting anything accomplished. If you want to be successful you need to stay orga...

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High time for me !

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Marc Kneepkens's curator insight, July 17, 2013 9:06 PM

A few good tips for starting entrepreneurs.



Get your Free Business Plan Template here: http://www.business-funding-insider.com/free-business-plan-template.html

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How to Incorporate a Competitive Analysis Into Your Business Plan

How to Incorporate a Competitive Analysis Into Your Business Plan | Startups | Scoop.it
If you’re working to get a small business enterprise off the ground, one of your most important tools will be your business plan. This is the document you will show prospective investors that will give them the confidence and peace of mind necessary to hand you their hard earned dollars.
Via Marc Kneepkens
Jose Gonzalez's insight:

Thank you !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

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Marc Kneepkens's curator insight, June 17, 2013 3:24 AM

This article offered to you by:

www.Business-Funding-Insider.com  Your site for information about funding, investors, free business plan templates, free llistings.


Get a Free Business Plan Template:  https://growthink.infusionsoft.com/go/freebptemplate/gt4045/

DAVID T DEWBERRY's curator insight, November 8, 2013 8:31 AM

Most SBME know their busines, what they do. What most require assistance withis the business of the business, which is beyond what they do(the product or serivces they provide). The busines of the busines is the how they do their business, the Financials, HR, Marketing, Legal, etc.

 

There's the challenge and opportunity, why? They're so involved in doing, working in the business many never get to the point of working on their business. Most business plans sit on the shelf collecting dust on in a drawer never seeing the light of day. A living, breathing business plan that is followed, updated, executed is essentail to reach the business full potential. It dosen't matter if you're a start up or been in business for year, the formular for success is the same. Plan your work and work your plan! a workable business plan has an implemetation plan that is very easy to follow has specific duites and responsibilites with action items , who is to to do what where and when. SMART...Specific...Measureable...Acheivable...Realistic....Timeline!

 

The difference between just being in business and having a succussful business is how the busines owner(s) know and do the business of the business. Trusted advisors, consuktants can assist with expertise and guidance , the ulitmate responsiability and accountability is within the owners ability to not only work in the business , but to work on the business.

 

David T. Dewberry

DEWBERRY ASSOCIATES

dewberryassociates@gmail.com

937.301.3441

Venkadesh Narayanan's curator insight, March 14, 5:07 AM

http://bacourse.com/

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Why Venture Capital Investors Should Want to See Your Five Year Financial Proforma - Rockies Venture Club

Why Venture Capital Investors Should Want to See Your Five Year Financial Proforma - Rockies Venture Club | Startups | Scoop.it
A good venture capital proforma should show all years from present through exit to demonstrate your ability to SCALE, justify VALUATION, and plan for EXIT.

Many entrepreneurs and VCs alike are hesitant to produce a proforma for more than two years out into the future.  They claim that it’s impossible to know what will happen and that the third year and beyond are “just numbers.”   While I would agree that nobody expects a startup to perform according to its projections, I am heartily in disagreement with the claim that a five year proforma doesn’t tell us anything.

To read the full article, click on the title.

Get your Free Business Plan Template here: http://bit.ly/1aKy7km


 


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Jose Gonzalez's insight:

Ok...........Thanks

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Marty Koenig's curator insight, February 12, 2014 3:15 PM

Totally agree with Peter. the numbers going out 5 years show the savvy investor that you are:

1. considerate of what they are used to seeing

2. have thought well beyond the possible about how to get there

3. that you believe you can scale and can put that on paper



And the rest of what Peter says about valuation,investor return, and exit strategy prove that you know what you are talking about. 


So many entrepreneurs think it's all about the PRODUCT PRODUCT PRODUCT. Investors don't really care that much about the product. They care about the people they are investing in. and if the people aren't willing to the the energy and thinking into a 5-year projection are they really the type of people a VC wants to invest in? 


This, I know first hand.  

Marc Kneepkens's curator insight, February 13, 2014 11:59 AM

Learn to think like an investor is my advice to very Startup pitching to either an Angel Investor or a VC. This is another good article explaining this. Remember that financial projections are an essential part of your business plan.

Marc Kneepkens's curator insight, February 13, 2014 12:11 PM

Another great article by an investor.

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Talking to angels and VCs? Get to 'no' as fast as you can

Talking to angels and VCs? Get to 'no' as fast as you can | Startups | Scoop.it
Startups seeking angel funding shouldn’t be so afraid of the word “no.”

 

By Brian S. Cohen, Chairman of the New York Angels.


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Jose Gonzalez's insight:

Very well 

Thanks

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Marc Kneepkens's curator insight, July 1, 2013 5:31 AM

You can get a lot of information from 'no'. Just don't waste your time on the ones who are not right for you.

Best tactic: show up with the best business plan you can put together. Then the 'no' will not be about issues related to your presentation or your numbers. It will be about the right fit.


Don't waste the investor's time either, show up with a great business plan.


Get your free Business Plan Template here: http://www.business-funding-insider.com/free-business-plan-template.html

Timothy Wright's curator insight, July 25, 2013 1:31 PM

Great Advice, VCs and Angels can tie you up waiting for an answer, getting a quick no allows you to move forward with your search and see who is truly interested in getting involved.  Speed is essential for early stage funding.

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'Crowdfunding' trend poised to make mark on US investing landscape - Washington Post

'Crowdfunding' trend poised to make mark on US investing landscape - Washington Post | Startups | Scoop.it
'Crowdfunding' trend poised to make mark on US investing landscape Washington Post Gathering small sums of money from a large number of people online — known as “crowdfunding” — is poised to take off in the investing world, with backing from...

Via Marc Kneepkens
Jose Gonzalez's insight:

Wow !!!!!!!!!!!!!!!!!

Thanks,

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Marc Kneepkens's curator insight, April 30, 2013 2:08 AM

It's happening. Expect another huge wave as soon as the SEC publishes the new rules.

Some basics for startups: http://www.business-funding-insider.com/crowdfunding-startups.html

Philip Cardwell's comment, May 7, 2013 5:47 PM
You are right, Marc. That is the message that we are trying to get to those who may want to utilize EQ CF., by having them attend: http://www.equitycrowdfundingdaily.com/1/post/2013/05/the-most-anticipated-crowdfunding-event-of-the-year.html
Marc Kneepkens's comment, May 8, 2013 12:37 AM
Good information, let's get the word out.