Devin Thorpe

Entrepreneurs raising capital via regulated investment crowdfunding are required to make rather extensive public disclosures. This makes supporting due diligence easier, because most questions investors have can be answered with the prepared documents and disclosures. Furthermore, Reg CF yields average investments of about $1,000. Most investors risking capital on that scale don't require the level of due diligence that angel investors who deploy $25,000 to $100,000 or venture capitalists who deploy $250,000 to $25 million do. Again, this tends to make the diligence process easier for the entrepreneurs. Finally, one-on-one conversations are critical to a crowdfunding raise. One is enough to close a sale with a small investor.

While there is little regulatory infrastructure governing crowdfunding for donations (e.g., GoFundMe) or pre-sales (e.g., Kickstarter), there is extensive regulation and oversight of regulated investment crowdfunding. There are dozens of active portals raising capital under Regulation Crowdfunding, the regulatory implementation of Title III of the 2012 JOBS Act. Each is routinely audited for compliance by both the Securities and Exchange Commission and FINRA. Issuers, that is, companies raising capital, are also required to comply with the rules, raise capital on registered portals and file reports with the SEC before and after raising capital. Entrepreneurs should anticipate legal expenses as part of any securities offering.

This is great! Some of the best networkers I know lean into that intentionality by identifying key people they want to meet in advance of a networking event at a conference or meeting. They reach out via Linkedin to connect beforehand and make appointments to connect during receptions and such to avoid the need to "work the room." You're right on, Jacob.

One of the great ways to improve diversity in the marketplace is through purchasing and logistics. For example, Coca-Cola has a formal program in place to support diverse small business owners who provide services to the corporation. The company has engaged diverse women to lead efforts to finance those small businesses through regulated investment crowdfunding.

Doing something to address the problem directly is the most important step. You need to create a sense of power and control over the situation by taking action. Even if the first action is preliminary, say, forming a task force or enlisting help from an expert, there is no failure so long as you are moving forward. You may have a delay, a learning experience or other euphemism for a challenge, but failure only happens when you stop moving forward. Prioritize the step of taking action.

Over the past twenty-plus years, I have volunteered to mentor dozens of entrepreneurs who have gone on to successfully raise capital. I volunteered through an organization now known as Kinect Capital. The model Kinect uses is to have a small team of volunteers listen to the pitch three or four times, offering feedback each time. It works. In fact, it works remarkably well. If you'd like to raise capital, gather a group of mentors and give them your pitch. Gather their feedback and then circle back to do it again three or four times. You'll be amazed at how much you can improve with the benefit of deliberate practice and honest feedback.