New Law (Potentially) Brings New Money to the Black Community

[freetroit]

Is this similar to what is doing?

Buying private equity in the tech sector?

 

[L&HH]

Subs.
I'm more surprised that it was illegal to begin with. Guess it's not really an issue in the immigrant community b/c I know mad people that own small stakes in multiple businesses and I never heard the restrictions come up.

Tell me if I got this right tho brehs: So lets say I invest 10K for a 10% stake in a barbershop for example. At the end of the year they cut me a check for 10% stake of the profit...That was illegal to do unless I met the restrictions before?
Or does this apply to a different kind of investing, b/c the article was unclear

Non accredited investors can invest in a company as long as they're a pre-existing contact and weren't solicited. I think there was also a limit to how many investors and how much they could invest.

In your example that wouldn't have been illegal as long as it's someone you knew already.

 

[#1 pick]

@Brooklynzson @cook Can ya'll sticky this. This is groundbreaking.

 

[Canon]

interesting stuff

 

[JahFocus CS]

subs

 

[#1 pick]

I'd be cautious about equity crowdfunding. If a company can't get funding through traditional means then the chances of them being successful aren't very high.

Just read the stories of shytty kickstarters to see why crowdfunding in general isn't a good idea (good for the company but not so good for the backers/founders)

A lot of times these companies are in over their heads and can't deliver the product in time. They end up taking losses because the economy of scales they thought were supposed to happen didn't. And also they don't know how to build a successful brand company past the initial "excitement phase" of kickstarter.

https://www.reddit.com/r/shyttykickstarters/

In all fairness, you need through people in any form of business. Every startup should have a team of older successful business owners to partner with and have as mentors. Since we lack that part of the process which is VITAL to the growth of any business.

 

[richaveli83]

Also gonna speak to the Mr.

Let me bump this thread and tag some folks

@Ultima @BlackPearl @Thomas @Originalman @Paradise @Ol' Otis @richaveli83
@Wild self
@JudgeJoeGorilla
@BmoreGorilla

Good lookin op

Good looking out sister!

 

[richaveli83]

I'm going to share this with some friends. I'm ignorant about these type of things but I want to learn.

 

[L&HH]

That's not true. I've funded my business strickly through online sources. Grew revenue to 100K in less than a year. All my lines of credit will be paid off in the next 2 months.

Besides crowdfunding isn't just for businesses. People take out private loans too.

Some people, like myself, prefer online banking to avoid discrimination and predictory lending. It also cuts cost and is faster.

I have zero issue with online lending options. In fact I recommend them (kabbage for example). However online lending isn't the same thing as equity crowdfunding. My caution was strictly for people who are interested in the investing/funding side of equity crowdfunding. If I'm a business I'd be interested in any and all funding options however equity crowdfunding would probably be my verrryyy last resort option. Having a large number of unsophisticated investors early in your company might be a headache. You're probably going to have to do much more detailed reportings (possibly including some sensitive information that you might not want public) also having to answer to all of these people would be annoying as well. Also having all of those unsophisticated shareholders early on might prevent me from raising VC money later on. But if that's my only option then I'd take the money.

From an investors side I'd be worried about liquidity (likely won't be able to become liquid for 3-10 years if at all). I'd be worried about being dilluted later on and in general I don't think the quality of companies that will be seeking equity crowdfunding will be very good.

In all fairness, you need through people in any form of business. Every startup should have a team of older successful business owners to partner with and have as mentors. Since we lack that part of the process which is VITAL to the growth of any business.

 

[Responsible Allen Iverson]

That's not true. I've funded my business strickly through online sources. Grew revenue to 100K in less than a year. All my lines of credit will be paid off in the next 2 months.

Besides crowdfunding isn't just for businesses. People take out private loans too.

Some people, like myself, prefer online banking to avoid discrimination and predictory lending. It also cuts cost and is faster.

What type of business do you have?

 

[Alaafin]

time to hit up some companies for opportunities

 

[BiggWebb79]

Just thinking of the possibilities of success this can have with the right situations. Thank You President Obama

 

[™BlackPearl The Empress™]

I have zero issue with online lending options. In fact I recommend them (kabbage for example). However online lending isn't the same thing as equity crowdfunding. My caution was strictly for people who are interested in the investing/funding side of equity crowdfunding. If I'm a business I'd be interested in any and all funding options however equity crowdfunding would probably be my verrryyy last resort option. Having a large number of unsophisticated investors early in your company might be a headache. You're probably going to have to do much more detailed reportings (possibly including some sensitive information that you might not want public) also having to answer to all of these people would be annoying as well. Also having all of those unsophisticated shareholders early on might prevent me from raising VC money later on. But if that's my only option then I'd take the money.

From an investors side I'd be worried about liquidity (likely won't be able to become liquid for 3-10 years if at all). I'd be worried about being dilluted later on and in general I don't think the quality of companies that will be seeking equity crowdfunding will be very good.

Fair enough, an opportunity is what you make it though. You're also not taking into account that there is different reasons and strategies for investment.

My issue with your post was the line about companies not likely to be successful unless they can get "traditional" funding which is just simply not the case. Traditional funding has been used as a means of oppression for BP and there is nothing wrong for looking to other opportunities to grow your business.

 

[outordinary]

I'll have to read into this some more, I have some buddies that have their own business and I don't mind investing into them.