3 World Trade Center Rebuilds With Crowdfunding

Five thousand dollars is all you need to own a little piece of this big Lower Manhattan real estate development project. The high profile 3 World Trade Centre (WTC) deal is just one of a growing number of real estate investment opportunities through a crowdfunding portal.

The Firm Behind the 3 WTC Deal
Fundrise co-founder, Dan Miller, calls it “proof of the power of crowdfunding”, and he appears to be right. Fundrise is the real estate crowdfunding portal where you can find the WTC offering. The Washington D.C.-based firm is using new securities laws to make it possible for more regular people to invest in a real estate deal, and technology is allowing them to distribute – or democratize - the investment, thereby challenging the traditional model, where, as Miller has been noted to say, the banks act like “country clubs” and control tightly who gets in.

How the Deal Works
Fundrise is underwriting the deal and funding the project on its own balance sheet. Investors are buying the bonds as senior secured debt instruments. There is a projected five per cent tax-free return over five years. Fundrise generally claims that all of its real estate crowdfunding deals include 10 to 20 per cent capital junior from the real estate company in the first loss position.</p>

Want In? There’s Still a Catch
It’s not quite as easy as grabbing the wad of cash from under your mattress. To be eligible for this opportunity, investors must be accredited (Are you? We can help you get accredited.) Under SEC rules, that means an individual must have earned income of more than $200,000 in each of the preceding two years, and a net worth of over $1 million.

About Real Estate Crowd Funding
The number of real estate crowdfunding firms continues to grow, and it is changing the real estate investment landscape. Developers have new ways to finance their projects. Socially minded investors have new ways to support their communities. And smaller investors now have a way in.

About 3 World Trade Center
WTC is expected to be the 3rd tallest tower on the Lower Manhattan site, with 80 stories and 2.5 million square feet of office space. Completion is scheduled for 2018.

Advertising for Investors – 4 Things to Know Before You Start

So you are ready to seek out investors. If this is your first time looking for a capital infusion from the crowd, there are a few things to know.

The Rules

The JOBS Act and SEC’s Rule 506(c) of Regulation D allow issuers – companies seeking investment capital, like you – to offer securities through “general solicitation”, including advertising, as long as a couple of key conditions are met:

• The investors you accept money from must be accredited, and

• You take reasonable steps to verify that your investors are accredited.

So, advertise away.

The Need vs. Readiness

A common mistake many entrepreneurs make is that they think they are ready to seek out investors, when in fact they are not. You may need to attract investment if you’re going to ______ (fill in the gap with grow/expand/survive/launch the next product/service/app), but that doesn’t mean you’re ready.

The Messages

If you embark on a campaign to attract investors before you are ready, you run the risk that your language, among other things, will trip you up. When you need investment, you may find yourself saying things like this:

• I’ve run out of the money I had

• I can’t/won’t invest any more of my own money

• I haven’t found any other investors, so I’m looking to you.

On the other hand, when you have done your homework and are truly ready for investment, you’ll be saying things like this:

• I know my customers, market and product/service and I’m ready to take my business to the next level. Now, I’m looking for a partner to help me get there.

• I’ve looked into a variety of sources for capital, and because you seem to be the best match, I’m interested in working with you.

The Advertising

Know what kind of investor you are looking for, and what kind of an investor may be looking for you. That will help tell you where to find them. Sites like Patch of Land or Crowdfunder help bring together investors and entrepreneurs, but there are many others out there. There’s social media (a must today), newsletters, newspapers, investor magazines, and even billboards. Once your research is done, and your budget is set, you’ll be able to put together a campaign to give you the greatest opportunity for success.

Want to Start Your Own Business?

Are you intimidated by popular TV shows that only show entrepreneurial aspirations being achieved by those with access to six and seven figure funding sources? Don’t feel that unless you’re in the same league as Donald Trump, you will never get your idea off the ground or make it profitable.

It doesn’t matter if you weren’t president of the small business club at school, or if you didn’t make enough money mowing lawns to buy your first car at age 16 - it’s never too late to unleash your entrepreneurial instincts. Here’s why:

Easier Access to Funding

Once you have a workable idea, backed by a solid business plan, it has never been easier to secure investment funding for your startup business. Unlike in the past, when strict rules were in place, governing who you were allowed to solicit for investment and how much you could ask for, today’s entrepreneur has greater than ever access to individual investors looking to invest in new ideas and new companies. Though at the moment, most private investors still need to be accredited, the process of raising capital is generally more accessible to all.

Easier Access to Global Markets

The Internet has opened up worldwide markets to even the most humble startup entrepreneur. Even as a one-man-show, if you have a website and a strong presence on a variety of social media platforms, you can expose your products or services to a person living across the street or across the world with equal ease. It is now possible to sell anything to anyone, anywhere.

Starting Businesses is Cheaper than Ever

Many businesses can be started from home, with one person, a computer and an Internet connection. Investment funding will undoubtedly be necessary at some stage as the demands of your business grow, but you can get started on a shoestring.

Less Pressure to Take Risks

While there is an element of risk attached to starting up any kind of business, it is less than it used to be because businesses are much cheaper to start. Failure, therefore, is less expensive. Many entrepreneurs used to work for other people, and realized that that is not risk-free either – redundancy could happen to anyone at any time.

There has never been a better time to start your own business. Learn more about how to ensure your investors are accredited investors by visiting VerifyInvestor.com

We Can’t All Be Silicon Valley Startups – Unglamorous Ideas Need Investment Too

“We can’t all be heroes, because somebody has to sit on the curb and clap as they go by.”

This famous quote from U.S. showman and social commentator Will Rogers can be applied to the business of starting a business. Because such a large percentage of startup investment dollars are channeled into the more “glamorous” areas such as technology and healthcare, many more “boring” bread-and-butter ideas fail to attract the investment they need. And yet studies show that it is often these businesses that are the most profitable.

Financial information company Sageworks, for example, recently surveyed the financial statements of over 1,000 private companies with annual revenue of less than $10 million, and discovered that “boring” accounting firms were making the most profit.

These types of service-related companies are quite often at the top of the profit margin list. Virtual assistants, for example, are becoming very popular as many small online and brick and mortar companies, who are unable to afford a full-time employee, make use of a virtual assistant.

Master the Mundane

There are literally millions of business owners who make a lot of money by selling unglamorous products or offering routine, everyday services. The secret of mastering the mundane is to offer something that your customers can’t or won’t do themselves, and can’t get done anywhere else.

Love What You Do

The success of any business really relies on what you can personally bring to the table. If you do something you love and are therefore passionate about what you do, it follows that you will also be knowledgeable, committed and tenacious. If, on the other hand, you’re unsure, or half-hearted about your business, this will undoubtedly show in your results.

Embrace the Everyday

So if you want to start a business, don’t overlook the unglamorous areas. If you look around, you’ll see that good business ideas are everywhere – from your garage to your car to your friends and neighbors. Identifying a viable business opportunity is often as simple as finding out what common problems are out there affecting large numbers of people, and finding a way to provide solutions to those problems.

Are you looking for investment for your business, no matter how unglamorous it may seem? Or do you want to become an accredited investor in order to offer funding to a startup business? If the answer is yes to either, go to VerifyInvestor.com.

Top 5 Recommendations for your Startup

Investors know that to accurately gauge the health of a startup business, they need to look at how much time the managers of that startup spend on evaluating risk. They determine how much effort goes into containing bad risks, and how much energy is invested in actively seeking out new and calculated risks that are anticipated to end in a positive result for the business.

Investors like to see a certain element of risk taking in a potential investment. They tend not to fund overly conservative business plans, but nor will they invest in a wildly risky one. They want to see homework done, and they need to see commitment. This indicates business intelligence on behalf of the entrepreneur, which is a positive indicator for the future success of the startup.

How Do I Avoid Bad Risk?

In business, as in many things, there are no guarantees, but a lot can be learned from the experience of other entrepreneurs and business experts. Some general rules of thumb include:

• Solve Existing Problems

It’s risky to create solutions for problems that don’t yet exist. You won’t have any customers. Aiming to meet a significant customer need that already exists is a less risky option.

• Create an Idea with Legs

One good product or service, with no plan for a line extension or additional services, will very soon be outstripped and outgrown by your competitors. Mitigate the risk of competition by planning to continuously upgrade and innovate. Do this from the outset, as part of your proactive business plan.

• Don’t Go It Alone

It’s natural to want to be the best in your field and to make sure you eliminate all competition. However, when you forge partnerships with others of like mind, the sharing of resources and the economies of scale help to make risk less unpredictable.

• Use Investment Wisely

Lots of initial startup money does not reduce risk, and it’s not a guarantee of success. Try to fund your initial phases with inside money, using investor funding to expand and accelerate growth.

• Embrace Risk

Change is necessary and risk is essential. Investors know that more is learned from failure than from success.

Accredited investors who appreciate the risks entrepreneurs take with their businesses are your most likely source of capital. To learn more about accredited investors, visit VerifyInvestor.com.

Are There Any Original Ideas Left? Creating New Startup Businesses from Old Ideas

Whether it's a media presentation, a marketing effort, or a product or service, most of these concepts consist of taking an original idea and extending it, adding new elements, and presenting it as something brand new. The finished product is not in fact "brand new", but a variation of previously conceived ideas.

This is why, if you're an entrepreneur, trying to come up with a new, original and unique idea may not be necessary. And even if you do actually stumble upon a brand new idea, it doesn't mean it's worth turning into a business. Sometimes, there's a good reason why new ideas haven't been translated into business propositions!

Doing something that's never been done before ends in success only in a very small percentage of cases. Most successful businesses are built by taking an old idea and making it new. There are many ways in which this can be achieved, but two of the most important are:

Narrow Your Focus

If you try to be everything to everybody, you end up losing focus and diluting your key talents. Focus on one key performance area, and get that absolutely right. As a general rule of thumb, the more you expect people to spend on a product or service, the more likely they are to demand specialized, focused expertise.

Create Combinations

Most "new" ideas are actually combinations of old ideas. This strategy works by taking the best parts of two or three different business ideas and combining them to create a new concept.

One of the earliest examples of this is wireless telegraphy. All the components used by Marconi in his "magic box" had already been thought of, or invented by, other people. Marconi's success came when he combined those ideas into something completely new.

The iPod is a great modern example of this strategy. MP3 players were already in existence when the iPod was first launched in 2001, so as a concept, the iPod was nothing new. It just took the best elements of existing products, added a few unique features, and suddenly a brand new device was born.

If you're looking for accredited investors for your "new from old" business idea, visit https://VerifyInvestor.com.

The Latest Trends in Early Stage Startup Investment

General opinion seems to be that there has never been a better time to be an entrepreneur. Venture capital funding in 2014 reached almost $24 billion - its highest levels in 13 years.

However, this doesn’t necessarily mean that early startup companies are having an easier time of securing investment. Most of the capital invested is going to more established companies with more proven track records.

It’s true that there is a bigger pot than before available for start up companies, but there is still a significant disparity between the percentage going to early stage businesses and that earmarked for later stage investments.

In order to tap into the larger, but still comparatively small, pool of investment funding, early stage startups should take note of some of the emerging trends that are influencing investment.

The Numbers are Growing

The late 20th century trend that saw the marketplace dominated by massive corporates is starting to give way to the rising popularity of smaller companies. It’s a trend that’s taking place across a wide number of industries – from the high tech startups of Silicon Valley to the car industry – and is expected to set the tone for a while yet.

Startups are Becoming Cheaper to Get Off the Ground

It is cheaper than ever before to start a business. The main reason for this is that technology and infrastructure are cheaper and easier to come by. The increasing availability of white-label solutions and apps for all sorts of business administration functions – such as accounting, user testing, etc. – have greatly simplified procedures and reduced costs.

The effect of this phenomenon is that failure costs less. This means more entrepreneurs will have the courage to try out their ideas on the markets.

Investors are Becoming Easier to Reach

Angel investors are better organized than ever before, and are more readily accessible to entrepreneurs. In the past, entrepreneurs had to tap into their personal networks in order to try and reach investors. Now, however, online communities such as AngelList, provide a platform for startups to post their business ideas in the hope of matching up with an investor who likes their business.

To learn more about accredited investors, and why you may need to verify them, visit VerifyInvestor.com.

Why Does 70% of all US Startup Investment Happen in Only 20% of the Country?

America accounts for about two thirds of all global venture capital activity. Europe comes in at a very distant second, with around 15%. However, within the U.S. itself, some states fare significantly better in securing startup funding than others.

Silicon Valley, in California, dominates, followed by Boston (Massachusetts), Seattle, (Washington) Austin (Texas), Denver (Colorado) and New York (New York). But even in the Big Apple, there are only about a fifth of the startups per capita compared to Silicon Valley.

What makes startups in these cities do better than anywhere else in the country? And why do they attract so many investment dollars? While no one can actually come up with a definitive reason, there are a number of factors contributing to this interesting phenomenon.

Silicon Valley, for example, is known as the hub for high-tech startups. According to the Halo Report, mobile and Internet startups (together with healthcare) accounted for almost 80% of angel investment in 2013. Experts in these industries thus naturally tend to gravitate to the area, bringing with them their expertise, innovative thinking and ideas. These things in turn attract investment. Supporting industries spring up around idea hubs, encouraging more growth and thus more investment. Suddenly everyone in the area is in the same business.

Hope for Other States
In 2011, the National Venture Capital Association cited only four states – California, Massachusetts, New York and Texas – as having broken the $1 billion mark in VC investment. Since then, however, other states are starting to catch up just a little.

Oklahoma City, for example, was voted the best place to launch a small business in 2013, according to NerdWallet – up from 5th place in 2012. Investment is encouraged by the city’s comparatively low income tax, and low cost of living. In addition, getting a business started is easy – applications can be done online, and the entire process completed in a morning.

While the rest of the country still has a long way to go to catch up with the amount of startup investment flooding into California, it’s obvious that there is potential for growth in many other US states as well - an encouraging sign for our laboring economy.

Certain types of offerings require that investors be verified as accredited investors.  To learn more, visit VerifyInvestor.com.

You've Found Investors - Now What?

Investment always comes with strings attached. Making peace with that is crucial if you want your business to enjoy the potential growth and development that can come as a result of a significant injection of outside cash.

The biggest string is usually a stake in the business. How big a piece of the pie you are going to have to surrender to an investor depends on how much your company is worth, compared to how much an investor is investing. For example, if your business is valued at $100,000, and an investor invests $50,000, he is essentially buying a 50% share of your company. However, the same investment only buys a five percent share in a company worth $1 million.

So, now that your company is part of someone's investment portfolio, there are certain expectations you will be expected to meet:

Form a Board of Directors

A formal board with rights of approval on all strategic decisions must be created. Investors will often demand board seats, and will also expect a periodic report from you, highlighting key issues.

Meet Milestone Objectives

On every funding term sheet there will be a list of milestone obligations that must be adhered to if you don't want to risk losing support from your investors for future fundings. The Board (and the investors) must be satisfied with the progress you're making.

Be Available

You are no longer your own boss, and your time belongs to someone else. Investors can and will visit or call for regular updates and progress reports. You will have to make time for these calls.

Communicate Often

You cannot communicate too much with the people who have invested in you. Don't wait for demands before giving them important updates or changes. And don't keep bad news a secret - you have a legal obligation to share all information with your shareholders. However, it is a bad idea to seek their opinion on every minor issue. Strike a balance.

Be Even Stricter With Investor Cash Than With Your Own

Spend it wisely in accordance with the business plan you used to secure the investment in the first place.

For help finding accredited investors for your business, visit VerifyInvestor.com.

Is the JOBS Act Working?

Not to be confused with the American Jobs Act, the Jumpstart Our Business Startups (JOBS) Act was passed on April 5th, 2012 mainly to promote job creation by improving access to capital markets. Title I of the JOBS Act provided a mechanism for “emerging growth companies” to go public. These provisions are referred to as “the IPO (Initial Public Offering) On-Ramp.”

Some other key provisions of the JOBS Act: The first allows for the easier launch of startups through the use of crowdfunding, and the second permits companies seeking investment to do so via “general solicitation” - for example, social media.

Two years on, is the Act having the effect it was passed into law for? While there is some difference of opinion on the matter, many experts feel that the answer to this question is definitely Yes.

The most effective part of the Act appears to be the IPO on-ramp. Reports indicate that IPOs increased by 70% in 2014, with just over 100 companies filing to go public. Technology companies in particular are taking advantage of the Act, with IPOs enjoying their highest levels in over 10 years. A recent study by Latham & Watkins showed that nearly 9 out of 10 IPOs are by emerging growth companies.  While there are undoubtedly other factors also contributing to these statistics, securities attorneys involved in these transactions cite approximately 74% as being a direct result of the simpler pre-filing disclosure regulations of the JOBS Act.

So What is the IPO On-Ramp?

Historically, many of America's most successful companies (think Apple) went public a few years after they got started. In the economic boom of the 1990s, over 80% of the IPOs were for companies less than five years old, and for offerings of less than $50 million.

In the last few years, however, there has been a drastic drop in that number, to the point where only 20% of companies go public within the first five years of their existence. Investors soon get tired of waiting and force the sale of the company so that they can recoup their investment. This has a negative impact on our economy as job creation is accelerated when companies go public.

The JOBS Act’s IPO on-ramp lowers the initial compliance costs of an IPO, meaning more companies are in a position to consider this route. Of course, many companies will still decide not to go public, but the JOBS Act at least gives them the option.

Almost 90% of investors in startups have accredited investor status. To see if you qualify, visit https://VerifyInvestor.com/how-to-order-self-investor-verification.