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After your campaign

Congrats! You did it! Bravo! You completed your investment crowdfunding campaign and raised money for your business.

Regardless of how well the campaign went, completion is a huge
accomplishment and the culmination of lots of effort. Here is what’s next:

1. Announce to investors the campaign is closed

2. Thank investors

Using the channels you employed to market your campaign, promptly thank investors and let them know it’s closed. Given the typical last week blitz, it won’t come as a complete surprise, but you’ll need to publicly notify investors of the campaign close.

3. Perk Email

Investors will provide their email when creating their account in the portal. After the campaign closes, you will receive those emails as well as the records you’ll need to send an email to coordinate delivery of your Perks. As part of that email, it’s best to confirm the shipping address, contact phone, and thank them Do this quickly after the close to provide this reward as close as possible to the positive behavior: investment.

4.  Unfunded pledges

These are pledges made by prospective investors that have not been funded – also called unfunded investment commitments. These occur when contacts complete the pledge process, but do not attach a bank account or other form of funding. They also happen when a funding account is attached, but they did not
initiate or push the funds via ACH, check, or wire transfer.

Most, if not all issuers experience some level of unfunded
pledges. Not all of your contacts are willing, or able to complete funding. The reasons range from financial timing, liquidity, or a change in interest in your offering.

Because disbursement of funds is based on two conditions:

  1. signed agreements, and
  2. actual funds in the Escrow account, it is important to manage unfunded pledges.

To make absolutely certain you can receive a disbursement, a best practice is to over-subscribe your target goal by 10-15%. Ideally there is a wider margin than this. By aiming to achieve more than your campaign minimum commitment, you greatly increase the likelihood of timely receipt of funds. Doing this early also allows investors who initially thought they would fund via one method, more time to setup/fund using an IRA, for example.

Staying on top of unfunded pledges during the campaign and especially in the last 20 days of your campaign can increase your final raise amount. It also helps avoid the possible disappointment of just missing your goals.

To manage unfunded pledges, use your portal login to view the status of pledges. Here’s how:

  1. Once you are logged in, click the dropdown menu
    My Account and choose Issuer Dashboard. 
  2. Click the “View Transactions for your campaign” link. 

The Transactions report will be similar to this example.

Look for transactions that show a Status other than Subscribed. These are your targets for achieving fully funded pledges. 

Good News

We help you increase the number of funded pledges by contacting investors who have not funded using our Nudge system.

How it works

At the beginning of your campaign, we share a template
document with the emails we’ll use to assist investors in the
process of pledging, connecting their accounts, funding, etc. You’ll be able to customize them to make sure the tone matches your campaign messaging. 

As steps are needed or completed, a semi-automated email is sent from a custom email address that includes your company name. e.g. [email protected]{yourcompany} If using your own
domain, it might look like: [email protected]

You will have the ability to coordinate/set the timing of some of the emails by contacting us to ‘send on demand.’ This will allow you to use your own efforts to encourage investors to fund their pledges along with the Nudge system. It’s a bit like having two people lightly tap investors on the shoulder vs. just one.

5. In the event the campaign fails to fund

No one wants this to happen, but it is important to understand this scenario as you’ll be communicating it to your investors. In the event the campaign fails to reach the Minimum funded goal by the close of the campaign, the funds are returned to investors. 

We make this process easy for the issuer/campaign company; ensuring compliance, and helping to protect their reputation. The rules of the SEC and/or State govern the return process.
In general, returns are made within 48 hours of close. Monies transfer from the escrow account back to the investors via the method they arrived. ACH and IRA transfers return to the
originating account electronically. Funds invested by check are returned as checks, which takes a little longer. The formula: 

Total of Funded Investment Pledges with matching
Signed Subscription Agreements is > or = to Minimum Goal
established at onset of campaign. 

If a material revision of your offering was made which adjusted (likely lowered) the minimum goal stated, the revised Minimum goal dollar amount is used. 

Because you would also lose the fees paid to the various parties who helped prepare for the campaign, it is vital to avoid this. 

6. Restarting a campaign

There are situations where it can make sense to restart a
campaign after it has been unsuccessful. This is typically done when campaign goals are not met, and the issuer feels [and we agree] there is a good reason to continue to raise after the close. Example: discovering the rate of return isn’t compelling enough.

Note: Given that most exemptions allow campaigns to run for a full year, it is often better to make a material change to the offering [course correction] earlier than waiting for the
campaign to close. Much better to fail fast and adapt than
die on the vine.

If the case for restarting is compelling, we’ll negotiate and
possibly waive our portal setup and escrow account fees. You would need to refile or change filings. A refiling example: an
issuer first uses a state-based exemption, such as MNVest, and the campaign is not successful. They could switch to RegCF, and would need to engage a securities attorney to push the
documents under a Form C into Edgar. This would be a restart.

As an issuer, you would not likely need to pay the same amount for attorney fees, etc. as much of the work is already done. To help you, we would likely refer you to our preferred relationships  who are able to make changes/refile cost effectively.

Restarting is possible, but best to avoid.

7. K1’s

K1’s or IRS Schedule K-1, is a required document for investors to file with the income tax returns when they invest in equity. This means if an issuing company offering only includes debt, K1’s are not required. Campaign/issuing companies that are organized as Partnerships and S Corporation owners are required to provide K1’s by mid-March.

To make this easy, we offer to produce K1’s for the first year at no charge. Further, you won’t incur any processing or mailing costs as investors have the ability to download their K1 from their investor dashboard as a PDF. They can even update their mailing address, in case they’ve moved. K1’s are located at the bottom of the investor dashboard under the heading ‘Tax Documents.’

We request that your CPA/Accountant provide us with a whole company view K1 by mid-February at the latest, and we’ll
prepare the appropriate K1 for each investor. The only support you need to provide is to direct investors back to their portal investor accounts at Forgotten passwords can be reset by the investor. We make the process of providing K1’s to your investors very easy.

8. Celebration Event

Marking the completion of your campaign with an event offers you great opportunities to showcase your momentum. It’s also a perfect time to recognize and thank your backers and team.
Other reasons to have a post-campaign celebration event:

  • Grow personal relationships and keep network engaged
  • Thank influencers and give awards to inner circle investors
  • Reinforce the founder’s role as guide and network as heros
  • Kick-off the next phase of the brand story
  • Make a large group (non-financial) ask
  • Recruit team members and ‘fan’ volunteers
  • Gather content for ongoing digital marketing efforts
  • Save money on shipping Perks to those who attend

9. Shipment of Perks

Assuming you were not able to physically hand out all of your Perks at a celebration event, they will need to be shipped or delivered. Do this as fast as you can after you have confirmed your investors’ delivery info, and receive your perks. Remember, prompt fulfillment of your promise will increase the likelihood an investor will help you in the future. They will probably be among your first customers, and because of their financial interest in your success, will follow what you do closely. Make them proud they became a backer.

10. Planning your next raise

Now that you have successfully run an investment crowdfunding
campaign, you have more power. Because a raise with a positive
outcome represents traction, raising funds when you need them is a little easier. Campaign companies that experience success, often view investment crowdfunding as a convenient capital source to support their growth and explore new ideas.

Consider leveraging the momentum, awareness, and efficiency of  putting plans in place to raise again. 

At this very moment,
you’ve never been closer
to your next campaign.

Let’s talk.

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