Regulation Crowdfunding

Why do I care about Regulation Crowdfunding?

Regulation for crowdfunding is a set of rules that both companies and investors must follow. There are multiple types of crowdfunding regulation that a company may choose to raise under, and Regulation Crowdfunding is one of them. The guidelines set forth by Regulation Crowdfunding dictate what companies/investors can and cannot do when raising or investing under Regulation Crowdfunding.

Choosing Regulation Crowdfunding

As a company, choosing which regulation to follow for your fundraising campaign is critical in determining the rules you must follow as well as how much more of this blog post you must continue reading. For this reason, we felt the question of whether or not Regulation Crowdfunding could be right for you should be answered first.

Regulation Crowdfunding (Reg CF) is ideal for raising up to $5,000,000. This is the maximum amount you are able to raise within a 12-month period under Reg CF. Additionally, you are able to raise at nearly no up-front cost. Obviously, this means that if you need to raise more than $5,000,000, then Reg CF may not be for you. Luckily, Regulation A+ allows individuals to raise up to $50 Million. The catch is there are greater up-front costs associated with Regulation A+. Launching a Regulation A+ campaign can easily cost between $50,000 and $75,000 dollars due to the various requirements.

So, to sum up all of the information presented above, if you need to raise more than $5,000,000 then Reg CF is not right for you. If you only need to raise an amount less than or equal to $5,000,000, then continue reading to learn specifics about Reg CF.

How PicMii Fits Into Reg CF Campaigns

Each Reg CF offering is required to be conducted exclusively through a single online platform. The intermediary must be either a broker-dealer or a funding portal registered with the SEC. That’s where PicMii comes in!

PicMii is an online funding portal that allows companies to offer up equity in their business in return for capital. PicMii is not a broker-dealer, however, and with that comes certain restraints such as the inability to offer investment advice or solicit specific offerings. Most importantly, we are not able to directly handle investor funds. This is the reason why PicMii partners with an affiliated third party for investors to complete their purchases in securities and to hold investment funds in escrow.

Conducting a Reg CF Offering

Conducting an equity crowdfunding campaign has never been easier. Of course, there are still many steps involved, but the process is pretty simple! The easiest way to understand what is required of you as you conduct a Reg CF offering is to run through the entire process step-by-step.

Choose PicMii

This step is easy! Although admittedly biased, we believe we are the most user-friendly equity crowdfunding platform in the industry.

Apply to Raise

PicMii Crowdfunding requires a simple application be completed before moving forward. Simply enter the required information on the application form and submit it to begin the application process.

Phone Interview

If accepted to move forward, you will receive two emails: Once confirming you are accepted to move forward and one to schedule a phone interview. During this phone interview, we get to know your company a bit better while you learn more specifics about the platform. In the end, a determination will be made if PicMii is a good fit for your company.

Determine How Much to Raise

The amount your company is looking to raise directly affects what is required of you as well as your up-front costs. As stated before, you may raise a maximum amount of $5,000,000 over a 12-month period. However, if you plan to raise over $107,000 but less than $1,070,000 financial statements are required to be reviewed by a public accountant that is independent of the issuer. If you plan to raise over $1,070,000, your financials must be audited by a public accountant that is independent of the issuer.

Offering Disclosure

Issuers conducting a Reg CF offering are required to submit their offering statement on a form known as "Form C". The form must be submitted through the Commission's Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system. The instructions to Form C instruct you as to what information you are responsible for disclosing as an issuer.

Submit Legal Documentation

PicMii requires each company on the platform to provide basic legal documentation, including: A Certificate of Incorporation, Corporate Resolution documenting the decision to crowdfund on the platform, a PPM/Circular, and a Subscription Agreement. All of these documents are submitted on the "New Campaign" form.

Set Fundraising Specifications

You may now set your company's own valuation, security type/additional perks for investors, desired capital to raise, and more on the platform. PicMii maintains the minimum investment at $10 to eliminate any barrier to entry for investors. This information is also submitted on the "New Campaign" form.

Upload Virtual Business Pitch

It is essential to your campaign to create a great virtual business pitch. PicMii creates this for you! All you need to do, is provide us with the necessary information on the "New Campaign" form and we do the rest! We promise to make your offering stand out!

Bad Actor Checks

Reg CF includes bad actor disqualification provisions. These provisions outline a list of disqualifying events that would make a company ineligible to raise through Reg CF. Background checks are performed on all "covered persons" as defined by the SEC.

Launch Reg CF Fundraising Campaign

Investors are able to purchase equity in your company. Funding continues until your goal is reached or you decide to collect.

Annual Reports

Now that your fundraising campaign is complete, you must fulfill the annual report requirements of a Reg CF offering. You are required to provide an annual report on Form C-AR no later than 120 days after the end of your fiscal year. The report must be filed on EDGAR as well as posted on your website.

Here To Help

Just like that, by following the steps laid out above, you will have successfully completed a round of crowdfunding and put your company in a position to succeed. At PicMii, we realize the process can get overwhelming at times, so we are here to help! We are happy to work with you and your company through the Reg CF process to ensure a successful and compliant crowdfunding campaign.

Regulation Crowdfunding