The investment crowdfunding industry is not losing any steam even during…well, you know… the feverish elephant in the room with a dry cough. Though you never know what will happen when the world unexpectedly halts for a few months, there is some rationale to why this little brother of crowdfunding might be showing some extra fight.
First, it’s designed to be a streamlined online process. The actual campaign and funding is legally required to happen online. So there’s that. Though here at Vicinity we really REALLY miss the old-world in-person hustle and bustle. We strongly believe in the value face to face community interaction, but that didn’t stop us from building a fully online portal that can present a comprehensive, compelling, and compliant campaign for a business owner raising capital.
Second, it gives everyone (not just big-time investors, though they’re welcome too!) the opportunity to invest local, and many are doubling down on supporting their community. What better way to show support than becoming financially vested in a business in your community? (Disclaimer: I’m biased.)
The industry, as a whole, doesn’t focus as heavily on local, but still offers opportunities to invest in early stage ventures that may be seizing opportunities to create new solutions in this post (present?)-Covid world.
And finally, sometimes we get by with a little help from our friends. I’d like to give a little shout-out to the regulators in the U.S. Securities and Exchange Commission for not only putting some temporary rules in place to help businesses that are raising capital, but [BREAKING NEWS] extending those temporary rules to keep the love train rolling.
A big help is the exemption for businesses raising up to $250,000 from having to get their financials reviewed by a third-party CPA. This can add several weeks to the campaign buildout phase and of course can add additional expenses to the cost of doing a raise. Regulators also removed the 21-day waiting period before businesses can utilize the money they raised.
These two extensions easily shorten the time period for business to launch and utilize crowdfunding for their capital raise by as much a month. With time often being a critical component of a business’s capital needs these regulatory exceptions provide much needed temporary relief for those leveraging investment crowdfunding.
To qualify, a business must have at least 6 months of operating history and disclose they are using this temporary waiver. These rules were originally put into place through August 31, 2020, but have been extended out to February 28, 2021.
While we think it’s always a good time to raise capital through Vicinity, businesses utilizing the exemption have an extra incentive to run a campaign. So if you own a business or know a business that is looking to raise funds, please let us know (email: [email protected])! We’d love to help leverage the increased speed and get more owners the funding they need to make their dreams a reality.