We help facilitate funding for your growing business. But it's more than the money. We connect you to community members who not only support you financially, but who can also become brand ambassadors within your vicinity.
Is this legal?
Well, it is now. "Regulation Crowdfunding" or Title III of the 2012 JOBS Act (aka "Reg CF") became a new law in May 2016 allowing companies to offer and sell securities online.
A big part of our job is to comply with the rules and regulations set forth by the SEC and FINRA for Reg CF.
Are there other companies that do this?
There are a number of companies out there who have a platform and facilitate investments; with different areas of focus and niches. In fact, over $1 billion has been raised through Reg CF. (Source: Crowdfund Capital Advisors)
We believe that while the principles of good business remain the same, geographies can have very different cultures. The Southeast is not the West coast. Your town might be different from our town. We value this unique brilliance and seek to connect owners to investors within their own vicinity.
Would my company do well with Vicinity?
If your company meets all or most of the following criteria, then you would likely be a good fit.
- Desire to finance growth or improve your existing capital structure
- Strong business fundamentals
- Excited for the connection, support and even accountability of local investors
- Seeking funds soon, but not an emergency (i.e. weeks, not hours)
- Strong network of potential investors
How much can I raise?
Under Reg CF, you can raise up to $5 million each year from non-accredited and/or accredited investors. (See our Educational Materials page for more information on this this topic).
How long does it take to launch?
It may take 2-4 weeks to complete due diligence and launch a "testing the waters" page to start marketing. Plan another 4 weeks prepare the rest of your offering and file your Form C. Once you have completed these steps your campaign can "go live". This process can move more quickly based on availability of information and responsiveness to our team.
How much does it cost?
Vicinity charges $0 upfront and a standard 8% upon a successful fundraise, which you can factor into the total funds you are looking to raise. In addition, we will:
- Assist with creating your complete and compliant Form C with the SEC.
- Provide some helpful template agreements.
- Help you build a dedicated customer offering page on our site.
- Collaborate on your Vicinity profile to help launch a captivating campaign.
- Promote your campaign to our community of investors in addition to your network.
- Provide direct access to your team for ongoing support before, during, and after your campaign.
- Introduce you to partners for anything you need help with: marketing, accounting, legal, etc.
Types of Offerings
A revenue is a loan or note that is paid back from a set percentage of your revenues. This is a flexible option that allows you to repay more or less towards the payoff amount, depending on your sales performance.
Each quarter, your performance is reported to your investors along with an update and a percentage of the revenue that you have generated.
The total repayment amount is set as a multiple of the fundraise - likely 1.25x to 3x.
This is your standard loan with regular disbursements (payments made quarterly or annually), an annual interest rate, and a maturity date (when the loan is intended to be paid off). These loans will likely include additional terms like a grace period after the fundraising deadline, a payment deferral so a payment could be delayed to allow the business to recover from a tough period without being in default, subordination if there is a "senior lender" like a bank, and if the loan is secured by any assets of the business.
You can offer stock/shares/units through Vicinity, which gives any investor actual stock ownership of the company (or a planned conversion to stock/shares). If preferred stock, shareholders may not have voting or management rights, but would receive dividends/distributions (when applicable) before common stockholders receive anything or, if the company is liquidated, earlier claim on the company's assets than a common stockholder. Common stockholders tend to be owners and employees of the company.
Generally, a preferred stock offering on Vicinity will have a "lead" investor who is accredited and will help negotiate the terms of the stock financing. The valuation (either pre-money or post-money), which is essentially what the company is considered to be worth, is what you can use to calculate your percentage ownership.
Unlike debt offerings that have a predetermined disbursement schedule, earning a return on equity only happens when (or if) the company is acquired or goes public AND the value of the stock has increased.
In revenue-based equity investing, the investor buys equity in the company, but the company repurchases a portion of that equity using a percentage of "top-line" revenues, returning a multiple on what they buy back (2x, for example).
The goal would be to provide a return on the equity bought back at the 2x multiple, while leaving some equity with the investors for any future upside. This has elements of both a revenue share and an equity offering.
Promoting Your Business
What do I need?
Simply put, we look at "People, Plan, and Pro Forma (financial projections)". First, you need to be able to tell your story. This will be the basis of your campaign page. This your story, and we can't tell it for you. But, we can help you build and design your campaign.
Before you can raise funds with us, you will need to file a Form C with the SEC. This is required for any Reg CF offering. This includes at least a 2-year independent financial review.
For more information, call us or send us an email at [email protected] We can provide you with our Legal Primer as well as helpful information on disclosing your financials.
Does Vicinity give investment advice or recommendations?
Not a chance. We provide a place where you can showcase your business and investors can peruse opportunities within their own community.
You provide your information and vouch for yourself. We do not curate the offerings on our platform. It is not legal for us to provide investment advice or recommend any company.
What do I need to know about advertising my raise?
Crowdfunding cannot be done offline. All Reg CF investments are required to be made through a funding portal or a broker-dealer. So, direct any investors to your Vicinity profile.
Using a "testing the waters" provision, you can start gauging interest in your offering. We can help with a TTW page and help with the required disclosures you need to make to remain compliant. You can advertise through any means you want - newsletters, social media, Vicinity events, even smoke signals. Just know that you are required by law to limit the content of your advertisements to factual information. Just include a link to your Vicinity profile with any advertisement.
How do I get started?
Reach out to us at [email protected] - we'd love to hear from you!