Solvari Chooses Equity Crowdfunding
Solvari is currently considering crowdfunding to finance Solvari’s seed round. The prospect is exciting because it not only provides a structured vehicle for our professional investors who have shown interest in Solvari, but it also provides an opportunity for our community to take part in our journey. Recent regulation updates and the rise of credible professional platforms, such as StartEngine, have had a considerable impact on our enthusiasm with this funding approach. Learn more about the rise of equity crowdfunding here.
What are Reservations?
The reservations process is being used to gauge the level of interest our community has for possibly investing in Solvari and allows us to provide a “thank you” in the form of 5% bonus shares if our campaign moves forward. The success of the reservation process will inform our funding strategy and next steps.
Crowdfunding Has Come a Long Way
Recent SEC Regulation Crowdfunding (CF) guidelines have put in place rules for online platforms to bring due diligence and rigor to their program to protect retail and accredited investors alike. Regulation CF requires compliance to both SEC and FINRA regulations and filings requirements, which include “bad actor” and anti-fraud provisions.
While investment in securities always carries risk, the SEC CF regulations bring consistency, transparency and rigor to the process. For example, the SEC requires annual reporting to be posted on our website. In addition, StartEngine requires companies on its platform to post quarterly updates on their campaign page. This transparency helps investors stay informed on the progress of their investments.
Why StartEngine?
StartEngine is an investor focus platform that makes crowdfunding consistent, professional, and equitable to all investors. They have helped over 1,000 companies raised over $1B from over a half a million investors 1,2. We feel their platform is a great vehicle for angel groups, syndicates, LPs, VCs, accredited investors, and even non-accredited everyday folks looking to get into the game. StartEngine’s investment committee, which is made up of professional VCs, evaluates every deal prior to accepting a company to its platform. They have a very low acceptance rate, turning away the majority of companies looking to raise funds. Roughly 25% of the fees to be on the StartEngine platform are paid in the form of company stock. In addition, they recently expanded their investor support team to help provide the best possible investor experience possible.
The Crowdfunding Advantage for VCs
Instead of SAFE’s, Convertible Debt or other complex high risk startup investing vehicles, most of the companies on the StartEngine platform offer straight equity in the form of common shares. StartEngine’s standard offering docs eliminate legal fees on both sides of the transaction, allowing investments to go further. In addition, through the StartEngine platform, investors can generally accumulate significant amounts of bonus shares, accelerating their investment beyond the standard offer. It doesn’t take an investment shark to understand that more for less is a good deal. In addition, with StartEngine Marketplace, investors on their platform can buy and sell shares from prior funding rounds allowing them to potentially unlock liquidity from their investments. (source)