Today is a huge day for the entrepreneurial and investment world. For 80 years, small businesses were limited to finding funding by word of mouth, private communication and slow, grueling bootstrapped networking. Though sending out one mass e-mail could solve all of a struggling company's woes if it landed on the right set of Angel eyes, entrepreneurs were forbidden from doing so due to SEC policy dating back to the Great Depression Era. When you really think about it, it almost made it seem like seeking investment was taboo – something best done behind closed doors in secret. But as of 12:01 a.m. this morning, Title II of the JOBS Act went into effect and loosened regulations on the way private companies can go about seeking investments - making general solicitation fair game to all, as long as you follow a few rules.
Almost immediately companies began taking advantage of the new openness. TechShop announced in a mass-emailed press release just hours after the flood gates were opened that it was seeking investors for $60 million in funding to build new facilities around the U.S., with hopes for one here in Arlington. Likewise, Realty Mogul told the International Business Times last week about its plans for a hardcore advertising campaign to reel in potential investors including billboards that will look like this:
Advertising and mass e-mailing, though, are not the only ways to go. In fact, websites specifically tailored to match entrepreneurs with accredited investors have been around for a while. But with the new lenient restrictions, these websites will no doubt explode as entrepreneurs and investors begin to leverage the new SEC rules. And because of that, if you fit one of those two demographics, you most definitely need to acquaint yourself with the following eight crowdfunded, accredited-investor-matching platforms:
- Angel List – If it's not obvious from the name, Angel List is a platform created by the guys who do the Venture Hacks blog to put startups and angels in the same room (via SecondMarket), metaphorically speaking. As of today, the main page reads: "Public Fundraising. It's here. Tell the world you're raising money."
- CircleUp – Focusing specifically on consumer goods startups, CircleUp believes that in addition to fundraising, matching entrepreneurs to like-minded investors on its site also gives them the mentorship needed for businesses grow more than just financially.
- Crowdfunder – More than just a platform to match investors and small businesses, Crowdfunder and its team was an important force in the lobbying for the JOBS Act and SEC regulations changes. Currently, they claim to host 31,440 entrepreneurs and investors, have 1,156 companies looking for capital funding and have more than $15 million in live crowdfunding raises.
- FundAmerica – This one's a little different from crowdfunding in the traditional sense, in that your essentially paying for the consultation and services of a team to seek out investment for you. It will be ineresting to see how FundAmerica will fare now that it will likely be a bit easier to contact investors, making the team's services not necessarily crucial.
- FundersClub – FundersClub is more for the investors as it is essentially a club through which they can buy equity. The "Club" then screens companies that are either recommended or apply to be considered by FundersClub, before being voted on by a panel. To date, only five percent of companies actually make it through the process, making FundersClub a very selective one.
- MicroVentures – These guys are pretty similar to Angel List and Crowdfunder, but have the bragging rights of working with some pretty huge clients in the past. In 2011, Facebook and Yelp raised early-stage money on the platform, and Twitter did so in 2012.
- RockThePost – RockThePost is also taking full advantage of general solicitation, highlighting companies on its platform who have already begun to advertise their investment needs. Washington-based CoFounders Lab is one of them.
- WeFunder – Backed by Y Combinator, WeFunder launched earlier this year in response to the new post-JOBS Act investment market. It's a lot like other investor-entrepreneur matchmaking sites, but it already expresses a strategy to add on all investors if Title III of the JOBS Act is passed, which would allow for non-accredited crowdfunded investing. It also looks and feels super user-friendly like Kickstarter.
