What is Cap Value?
Cap Value makes it faster and easier for companies and fund managers to organize, distribute, and manage a fundraising and investment program that is SEC compliant and uses the latest technologies that investors prefer for participation and transparency.
Partners and Distribution
PENSCO Trust Company. We have entered into a marketing relationship with PENSCO Trust Company, a regulated, self-directed IRA custodian with more than $10 billion in assets under custody and more than 45,000 clients. Through PENSCO, clients listed on Equity Round are approved to PENSCO’s client base and their related offerings are directly available to that client base through PENSCO’s marketing efforts. The support we have received from PENSCO is a validation of our commitment to establishing Equity Round as the leader in Rule 506c offerings and our commitment to maintaining best practices in due diligence, corporate governance, investor transparency through the investment packaging process. We believe that the marketing support and advocacy provided by PENSCO will provide our clients with unparalleled access to thousands of prospective investors through their IRA and 401k portfolios. We intend to build additional marketing partners like PENSCO to further broaden potential distribution to offerings listed on Equity Round.
IAAC. We have partnered with IAAC, a FINRA registered broker dealer and investment banker, which is also our technology partner for the Equity Round transaction engine. Investors that are interested to pursue an investment that they learn about on Equity Round are seamlessly directed through to IAAC and its representatives, where they are verified for accreditation and ultimately, invest through. All Equity Round and Company website-listed offerings will be transacted through IAAC. We will make an introduction to IAAC. for you to further discuss their role in providing investment banking support for your offering. Their standard fees include a 5% selling fee and a 5% warrant coverage up to a 10% selling fee and 10% warrant coverage (depending on their level of involvement in the transaction.
Press. At the launch of each campaign we will distribute a press release announcing your offering across the most targeted distribution in the country, reaching traditional, online and social media. Distribution includes print and broadcast outlets, newswires, online sites and databases, including the Associated Press, Bloomberg, CNN, Dow Jones, MSN, Thomson Reuters, The NY Times, Wall Street Journal, Yahoo Finance, etc. For an additional fee, we can offer a deeper level of media targeting.
Newsletters. We are launching the Equity Round Newsletter which will be distributed to our database of investors on a monthly basis. Each newsletter features engaging content and educational information for emerging growth investors. In addition, we will use the newsletter as a means to further advocate for deals listed on Equity Round. For an additional fee, we will develop proprietary newsletter strategies and execute these strategies on clients’ behalf to create broader investor awareness and maintain enthusiasm about their business.
Ecco Advisors/Hayden Communications. An additional service that we offer clients, negotiated for an additional monthly fee, is conventional road show support through our partners Ecco Advisors & Hayden Communications. There are no guarantees in raising capital and we believe that companies should use the broadest set of tools available to them to maximize their effort. The team at Ecco Advisors and Hayden Communications is seasoned, with 20+ years’ experience in working with development stage and emerging growth businesses to identify prospective investors, schedule road shows and presentations throughout every major city in the United States, and provide advice and support relating to the pitch process, investor conferences for presentations and media relations.
What is Equity Round?
A marketplace for investors to be shareholders in top quality companies and special purpose funds that are ready to accept new equity capital.
How deals are processed
Our investor verification, offering process and deal processing is done through our partner, Venture.co. The integration process is about 3-5 business days. After this point, we will provide you with investor relations support, compliance advisory, offering support, management of your data room, corporate housekeeping and strategic advisory for the 4-month offering process.
What companies are listed
Every company we work with undergoes an intensive investment packaging process that takes anywhere from 4-6 weeks. What’s completed in the investment packaging for companies is a a bottom-up financial model and pro forma, financial model, valuation structure and sanity check, investment brief, corporate fact sheet, investment brief and advisory support designed to best prepare companies on how to undertake a potential direct public offering. Not all companies that we package meet the criterion (see attached Listing Requirements) to list on Equity Round. Companies that meet our listing criterion will be posted to Equity Round, where they will have a dedicated portal within the site which features their offering, consisting of a section dedicated to describing the business, a section dedicated to providing disclosures relating to corporate governance,
Equity Crowdfunding Basics
Equity crowdfunding is a way for you to invest small amounts of money into a start-up or private venture—whether it’s a few hundred dollars or a few thousand—and receive an actual ownership stake in return.
What is Equity Crowdfunding?
Equity crowdfunding is the name given to the process whereby people (the “crowd”) invest in an unlisted company (a company that is not listed on a stock market) in exchange for shares in that company. A shareholder has partial ownership of a company and stands to profit should the company do well. The opposite is also true, so if the company fails investors can lose some, or all, of their investment.
CapValue offers a unique form of equity crowdfunding: issuing companies are strategically positioned and organized to operate like Fortune 500s, and are better prepared to navigate the challenges that arise along the way.
Who makes up the crowd?
At this point, only Accredited Investors can invest in companies that are fundraising on CapValue. When Title III of the JOBS Act is passed, non-accredited investors will be able to start investing in early-stage startups. The SEC provides more detailed information about the qualifications of an Accredited Investor.
How can an individual make a return on their investment?
It generally takes between 3-7 years for a company to sink or swim (failures usually happen earlier than successes). There are three main ways that an investor can see a return on their investment:
Dividends: the company sometimes pays a percentage of their yearly profits to shareholders.
Trade sale: the company is sold to another company for a lump sum, which is divided proportionally between shareholders.
Public offering: the company is so successful that it is listed on a stock exchange and shareholders can sell their shares at a price determined by public demand.
What is the JOBS Act?
Jumpstart Our Business Startups Act (JOBS) act: The JOBS act was created in order to ease security regulations on small businesses. The JOBS act was signed by Barack Obama on April 5, 2012.
JOBS ACT – Title II (Access to Capital for Job Creators): Title II lifts the ban on advertising for regulation D, Rule 506 and Rule 144A offerings. It also lifts the ban on general solicitation.
JOBS ACT – Title III (Crowdfunding): Title III allows individuals to make investments in small companies without being accredited investors. The company is allowed to receive up to $1 million over any 12-month period. Investors may not purchase more than $2,000 in securities or a certain percentage of his or her annual income or net worth as long as it is under $100,000 during a 12-month period.
Can I participate?
If an individial has more than $100,000 of annual income or net worth, they may invest 10% of their annual income or net worth, whichever is less. These folks are considered accredited investors. If an individual has less than $100,000 of annual income or net worth, they may invest $2,000, or 5% of their annual income or net worth, whichever is greater.
There are two (2) ways in which an individual can be an accredited investor. One of the following must be true in order for an individual to be an accredited investor. (1) First, an accredited investor must have at least $1 million in net worth at the time of investment. This worth can be measured jointly with a spouse as well. (2) Second, an accredited investor must have an income of more than $200,000 in each of the two previous fiscal years. However, if the income is joint with a spouse, the previous yearly income must be more than $300,000.
What are funding portals?
If the start-ups or projects you invest in become successful, you’ll own a share of the profits. That’s why this concept is so exciting. But you can’t find these deals through your stockbroker—and you can’t find them at Schwab, eTrade or your local bank, either. You can only find them on SEC approved “crowdfunding portals.”
Types of funding portals
Every portal is different. Some portals focus on technology start-ups, where you might find the next Google or Facebook. Others focus on food and beverage products, where you might discover the next Ben & Jerry’s, or the next Snapple. And still others focus on real estate, or bio-tech, or private loans. These platforms help entrepreneurs put their investment opportunity in front of thousands of investors like you—then you can decide which ones to invest in.
Typical screening process for listing companies
Evert platforms does some basic vetting. For example, if they’re evaluating a start-up opportunity, they’ll confirm the identity of the executives, make sure they’re not criminals, and make sure the company has been incorporated correctly. So at a very basic level, if you see a company listed on a credible funding platform, you know it’s legitimate. Then, the platforms will ask the entrepreneur to upload some documents—for example, a summary of how the business operates, financial projections or a 12 page deck.
Crowdfunding portals are made up of tons of listing pages. Every platform aims to build a robust “profile page” for each opportunity, so potential investors (like yourself) can make an investment decisions based on whatever content was gathered in the screening process. Ultimately, the goal is to be informed enough to ask some good questions, and have access to enough information to draw high-level conclusions regarding specific deals.
How portals make money
The first way a typical equity crowdfunding portal makes money is to charge the issuer a fee (ex: $750 per month) to appear on its platform and gain access to investors like you.
The second way a platform can make money is to register with the SEC as a broker-dealer; then it can charge the start-up a “success” fee on all the funds it helps raise. For example, if a platform helps a start-up raise $500,000, perhaps it might take a 5% success fee, or $25,000.
The third way portals can be potentially compensated is through something called “carry”. A popular term in the venture capital community, “carry” lets the platform earn a percentage of the deal’s long-term profits. Meaning, the platform only makes money if it picks profitable investments. The typical percentage is about 20%.
REGISTER TO INVEST
When you are ready to invest in opportunities prepared and packaged by business and investment experts, we invite your inquiry. Our team of capital market experts are available to discuss opportunities, simply send us your name and email to begin the registration process.
2175 Salk Ave, Suite 250
Carlsbad, CA, USA
P: +760 845 7545