Capital Raising Blog

Platform of the Month - Maritime Properties

Platform of the Month - Maritime Properties

Apr 20, 2016

Maritime Properties is a licensed real estate brokerage that has been committed to helping it's clients buy, sell and invest in real estate for for almost 2 decades.

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VersaPay Signs Partnership Agreement With Katipult To Bring Secure Investment Crowdfunding Software to Canadian Market

VersaPay Signs Partnership Agreement With Katipult To Bring Secure Investment Crowdfunding Software to Canadian Market

Apr 12, 2016

Toronto, ON – March 31, 2016 – VersaPay Corporation (TSXV: VPY) ("VersaPay" or the "Company"), a leading provider of cloud-based payment and accounts receivable management solutions, today announced that it has signed a partnership agreement with Katipult Software to bring a disruptive Crowdfunding solution for investment firms in the Canadian market. VersaPay’s gateway technology enables Katipult to provide clients using its crowdfunding software product with an integrated secure payment capability.

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Katipult Partners with Mangopay for UK Market

Katipult Partners with Mangopay for UK Market

Apr 5, 2016

• The Canadian company Katipult launches its white-labelled crowdfunding software in the UK.

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Top 4 Considerations For Launching An Online Investment Platform For Real Estate

Top 4 Considerations For Launching An Online Investment Platform For Real Estate

Mar 14, 2016

While the regulatory frameworks and rules for investment crowdfunding with accredited investors and non-accredited investors vary from country to country, there are four key considerations for bringing an online investment platform to market.

Depending on the platform structure and area of operation, the themes below highlight the considerations when dealing with security commissions and regulatory authorities.

General Partner vs. Intermediary models

The real estate marketplace model is what we define as the intermediary model, where the platform owner and the companies raising capital are independent. While the platform may screen issuers and deals for quality, the deals are still managed by third party issuers. The business model is usually transaction success fee driven, which in most countries requires some type of financial license. The other option is the General Partner model where the platform is being used to market proprietary deals online, using a management fee + % of profits business model. The General Partner model is the easiest as a starting point in most regions as firms are typically shifting their offline activities online and leveraging the same compliant processes.

Solicitation vs. Non-Solicitation

The solicitation ability will be a game changer in the long term, particularly with Title III rules in May 16th 2016,  which include non-accredited investors. It is great to see frameworks in place for accredited investor solicitation in a number of influential countries as a starting point. Many groups will be more comfortable in the short term launching a non-solicitation platform. This is  because it’s  in line with their current investor onboarding methods without “generally” soliciting, such as  scheduling web conferences/phone calls/face-to-face meetings with new investors that have been referred, introduced, etc. Under this scenario, the investment platform is acting as an investor relations tool for efficiencies and a better investor experience. General solicitation can always be used at a later date for permitted marketing strategies.

Debt vs. Equity

Debt based platforms often sidestep stricter securities laws regarding equity. Starting with debt deals rather than equity,  and evolving the platform for equity deals in the future is a possibility. Understanding the differences in compliance related to the two instruments may create a feasible roadmap for the business.

Domestic vs. Foreign Investors

Regulatory bodies in most countries are focused on protecting domestic investors than foreign investors. Whether your focus is high net worth individuals or institutional firms, dealing with foreign investors may open up additional possibilities or liabilities.  Thus, it is  important to grasp the implications of both focus to navigate the best go to market strategy.

Under every scenario, enlist the services of an experienced securities lawyer in your region to create a go-to-market strategy for your platform that is fully compliant.

 

Article also appeared on timesrealtynews.com:

http://timesrealtynews.com/top-4-considerations-for-launching-an-online-investment-platform-for-real-estate/

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What is Title III

What is Title III

Mar 2, 2016

The Title III provisions were described by Forbes Magazine as the democratization of investing. Mark Roderick, a leading Crowdfunding attorney wrote, 'Title III Crowdfunding is like nothing seen before in the U.S. securities industry.' Through Crowdfunding non- accredited investors (making under $200,000 in income and less than $1 million in net worth excluding their primary residence) can invest in anything from a start up company to real estate. Investments that in the past have been available primarily to the accredited investor (making over $200,000 in income with more than $1 million in assets net primary residence).

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Fraud and the Crowdfunding Model. A Cautionary Tale.

Fraud and the Crowdfunding Model. A Cautionary Tale.

Mar 2, 2016

We have all heard the term caveat emptor, Latin for let the buyer beware. All securities offerings come with lengthy legal jargon essentially informing the investor that past returns are no guarantee of future earnings. These rules, however, do not protect the investor from potential fraud.  The first prosecution of a fraud case involving crowdfunding was filed by the SEC in the US District Court of Nevada. The company in question had used several crowdfunding platforms to raise money under the Title II rules of the JOBS Act. The complaint alleges that only a small percentage of the money raised went into the stated investment and was instead funnelled into 'expenses'. So what is a potential investor to do?  The answer is due diligence and investing in platforms backed by real property.

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Reg. A+ approved by SEC – $50 million equity deals open to unaccredited investors

Reg. A+ approved by SEC – $50 million equity deals open to unaccredited investors

Jul 30, 2015

After many delays and when no one expected a fast resolution of the Title IV Regulation A+ from the JOBS Act, originally planned for October 2015, this past Wednesday the SEC approved the final rules which will entitle small businesses and startups to raise up to $50 million through crowdfunding.

The almost unexplainable delays around the incomplete and imperfect first legislation on constant revision during more than two years created suspense and often hopelessness for no one knew when the final rules would be in place and how they would in fact affect businesses.

  • As it happens, the new rules correct the previous in a timely, profound and well-thought direction. The new Regulation A+ is comprehensive and tries to solve most of the former problems:
  • Issuers are now allowed to raise capital up to $ 50 M per year.
  • Anyone, and not just accredited investors, may invest (with some limits on the amount; 10% of income and/or net worth.)
  • Issuers can operate without any other review than the SEC’s (state approval through state blue sky law is no longer required.)
  • Any kind of startups and also existing businesses can raise funds.
  • No 12 (g) registration thresholds.
  • Allows a different version that requires SEC and state blue sky reviews & fees, deals less than $20M per year, remain open to unaccredited investors but with no audit required.
  • Simplified presentation at the SEC, filing documents and audit electronically via EDGAR

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Article also appeared on BanklessTimes:

http://www.banklesstimes.com/2015/04/01/reg-a-approved-by-sec-50-million-equity-deals-open-to-unaccredited-investors/

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The UK real estate online crowdfunding market

The UK real estate online crowdfunding market

Jul 30, 2015

While in the United States the real estate crowdfunding business hasn’t stopped growing both in services and competition, in the newest market of the United Kingdom there are many opportunities waiting for bold entrepreneurs.

Several UK online platforms offer diversified investments.

Companies such as The House CrowdProperty Partner, and others, attract investors into buy-to-let properties where investors can cash profits on rentals proportional to investment as well as on the capital growth of their equity share.

Other companies like Hab Housing use the platform Crowdcube to raise money to build residential housing at affordable prices and sells environmentally friendly custom-built homes.

In this last case, investment can also be seen as a way for potential homeowners to self-build, avoiding bank loans.

While in the UK real estate space there’re some crowdfunding platforms oriented to pool investments into commercial properties or social experiments (for instance, to fund a biodynamic farm to preserve it from being sold, leasing it to its current owners), the market of office buildings, high-end properties, retail and shopping centres remains almost untapped…

Syndicating real estate investments online can also attract foreign investors from around the world to enter into the UK market and take advantage of all these new and undeveloped real estate crowdfunding opportunities.

Since April 1st 2014, every Internet crowdfunding platform in the UK has to comply with the new rules of the Financial Conduct Authority’s (FCA). These rules allude to fair commerce and require platforms to underline potential investment risks.

Platforms have to fit with some technical features to be fully operative and, above all, they need to clearly separate the crowd investment assets from the platform assets.

There’s a requirement for a capital reserve and, most important, restrictions on what individuals can invest, which is fixed at no more than 10 percent of their net investible assets, that is, of the available money discounting primary residence, pension and life insurance.

This last rule is meant to protect the untrained investor who, in spite of this 10% limit in the beginning, after two crowdfunding investments will earn the authorization to invest as much as he or she likes.

Real estate online crowdfunding in the UK is at this moment one of the many brand-new markets in the world that serious real estate broker-dealers, sponsors and investors should consider to maximize profits and to export some of the United States successful investment ideas and instruments.

The real estate online crowdfunding markets around the world are main topic among the investors and the global real estate business is open and only looks forward to being enlarged.

 

Article also appeared on BanklessTimes:

http://www.banklesstimes.com/2015/01/04/early-birds-alert-the-uk-real-estate-online-crowdfunding-market/

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