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Which state leads crowdfunding efforts? Texas, duh

Texas crowdfunding efforts have generated $1.8 million in investments over the course of about a year and a half.

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Leading the pack

Back in February of this year, John Morgan, the Texas State Securities Board Commissioner, predicted that Texas would become a national leader in US crowd-funding investment. New crowd-funding regulations, explained Morgan, would allow Texas-based companies to generate up to $1 million per year.

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We’re also warned to be “careful what we wish for”, but in this case it’s a good thing: Fast-forward to May 2016 and a recent article in the online journal Austininno seems to bear out that “Texas crowd funding efforts have generated $1.8 million in investments over the course of about a year and a half, and all that activity makes the state a national leader for this new type of funding businesses and projects.”

Commented Morgan, “We believe equity crowd-funding will catalyze new and wider prosperity, entrepreneurship and job growth in Texas.”

Do the math: With a population of more than 26 million, Texas is a massive market for companies wishing to raise capital through crowd-funding, [which serves] as a great gateway for all Texans to participate in funding growth in their communities and the state at large.

Playing by the rules

The key to Texas’ success is that intrastate crowd-funding allows non-accredited investors to invest up to $5,000 a year into one or more businesses and potentially get equity-based returns or interest from their investments. Businesses can generate up to $1 million from the crowd.

So far, 35 such offerings have been made in Texas, including six from Austin. In Austin, those include a group living development for tech workers, a kava bar, three tech startups working with Diversity Fund, and a restaurant.

Slow but sure

Despite all the activity, questions remain about how successful the efforts will be for both the businesses and their investors: Only 14 of the 35 fundraising efforts have reached their minimum investment marks. Only about 16 percent (roughly $1.8 million) of the $10.8 million that Texas businesses hope to collectively raise has been secured.

The website Altfi explains that Equity crowdfunding legislation in the US has been slow to develop. The industry as a whole is waiting for Title III of the JOBS Act, which will open up the industry to non-accredited investors.

When this act is passed it should release a huge amount of capital to small and medium sized businesses and provide a boost to the US economy.

A successful model

The most financially successful crowd-funding effort in Texas, so far, is the Chapman & Kirby gastrolounge that is planned as an event space and restaurant in downtown Houston. It has raised $440,800 from 134 investors. It seems to be a growth model that has worked: The offering is open to accredited investors, too, which means it may have generated investments of more than $5,000 from wealthier individuals.

#YeehawFunding

Nearly three decades living and working all over the world as a radio and television broadcast journalist in the United States Air Force, Staff Writer, Gary Picariello is now retired from the military and is focused on his writing career.

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4 Comments

4 Comments

  1. L.W. Dusty Brogdon

    May 31, 2016 at 2:09 pm

    See details here
    https://www.texasintrastatecrowdfunding.com/Texas-Results.html

    The truth is Texas Intrastate System is FAR behind where it should (Could) be!
    Of the 10 registered Texas Crowdfunding Portals (TCPs) with approved applications with our Texas State Securities Board (TSSB) , one has failed to fund ANY of the portals 7 Offers (Trucrowd(
    … One, Crudefunders has $1,050,000.00 of the $1.8 M total.
    Note;
    Equityeats has no offers and has never … CROWDBOARDERS has one offer and is in violation of The Texas Escrow Agent Rule …
    EquityBrick is new , Texas Crowdfunding has Zero offers and Zero funded.
    Business Funding is a No Show …

    DIYVERSIFY, LLC, New not active currently.

    BUSINESS FUNDING LLC
    2100 WYCHWOOD DRIVE
    AUSTIN TX 78746

    CROWDBOARDERS LLC
    4100 MIDWAY ROAD SUITE 2120
    CARROLLTON TX 75007

    CRUDEFUNDERS PORTAL TEXAS, LLC
    4550 POST OAK PLACE DRIVE SUITE 119
    HOUSTON TX 77027

    DIVERSITY FUND, LLC
    1108 LAVACA STREET # 110-309
    AUSTIN TX 78701

    DIYVERSIFY, LLC
    1127 ELDRIDGE PARKWAY SUITE 300 – 339
    HOUSTON TX 77077

    EQUITY BRICK LLC
    7703 NORTH LAMAR BLVD SUITE 510G
    AUSTIN TX 78752

    HIVE EQUITY INC. dba MASSVENTURE
    110 E. HOUSTON STREET 7TH FLOOR
    SAN ANTONIO TX 78205

    NEXTSEED TX LLC
    4101 GREENBRIAR DRIVE SUITE 122K
    HOUSTON TX 77098

    TEXAS CROWDFUNDING LLC
    20214 LAKE SHERWOOD DRIVE
    KATY TX 77450

    TRUCROWD TEXAS, INC
    10333 HARWIN DRIVE SUITE 460G
    HOUSTON TX 77036

  2. Pingback: Austin vs. Silicon Valley: Why is only one of the two terrified of the tech downturn? - The American Genius

  3. Pingback: Crowdfunding's first report card - good enough for the fridge? - The American Genius

  4. Pingback: Are Intrastate Crowdfunding Laws Still Relevant?

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Business News

Etsy is trying on second-hand fashion with purchase of Depop

(BUSINESS NEWS) With the younger generation moving away from fast fashion, it makes sense that Etsy has acquired one of the most popular Gen Z second hand apps.

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Woman looking at a rack of clothes in a second hand thrift store

Over the last few years, sustainable shopping has been a bullet point in the large-scale topic of the environment. Burning through clothing by disposing of old clothing and shopping from places specializing in “fast fashion” is causing damage to the earth.

According to the UN Environment Programme, the fashion industry is the second largest consumer of water and is responsible for 8-10% of global carbon emissions – more than all international flights and maritime shipping combined.

As a result, shopping second hand has become more popular, as opposed to mass-produced fast fashion. Online platforms like Poshmark and ThredUp have grown tremendously over the last 3 to 5 years.

Now, Etsy is getting in on the resale action through its acquisition of Depop – a second hand fashion app that allows for the buying and selling of used fashion items.

Etsy paid $1.6 billion to acquire the UK-founded company, which has attracted a younger, Gen Z-based audience due to its social media use and messaging on shopping in an ethical and environmentally-friendly fashion.

Etsy CEO Josh Silverman said the company was “thrilled” to be adding what it believes to be the “resale home for Gen Z consumers” to Etsy. Depop has approximately 30 million registered users spanning 150 countries.

“Depop is a vibrant, two-sided marketplace with a passionate community, a highly-differentiated offering of unique items, and we believe significant potential to further scale,” Silverman said in a statement Wednesday.

“We see significant opportunities for shared expertise and growth synergies across what will now be a tremendous ‘house of brands’ portfolio of individually distinct, and very special, ecommerce brands.”

Due to the COVID-related e-commerce boom, shares of Etsy have more than doubled in the last year. The stock was up about 6.7% Wednesday afternoon.

According to data from Crunchbase, Depop had raised a total of $105.6 million from investors including General Atlantic, Creandum, Balderton Capital, Octopus Ventures and Klarna CEO and co-founder Sebastian Siemiatkowski, prior to their agreement with Etsy.

With fashion being so cyclical, it may be safe to say that second hand will never fully go out of style.

What are your thoughts on resale apps being the answer to fast fashion woes? Let us know in the comments.

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As masks become optional, businesses find themselves stuck in the middle

(BUSINESS NEWS) One liquor store’s decision on mask policy following changes in local laws has become a recurring story throughout the nation.

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Woman in front of small business with two children, all wearing face masks

The American mask debate has comprised a whirlwind of clashing political ideologies, legal dilemmas, and personal agendas, with businesses placed directly in the middle of the storm. As the pandemic continues to run its course, a disparity in state mandates and legislation is only serving to increase the strain on these establishments.

With increased access to vaccines and several states rolling back their COVID guidance, the option to wear—or not wear—masks is becoming more discretionary, with businesses often having the final say in whether or not they expect masks to be used on their premises. One such business, a liquor store, posted a notice regarding their staff’s decision to continue wearing masks:

“In accordance with Johnson County mandates: Masks are now optional. Please do not berate, verbally assault, or otherwise attack the staff over their choice to continue wearing masks.”

The notice went on to say, “It is painfully depressing we have to make this request.”

That last line epitomizes many business owners’ stances. Places across the country have started allowing customers to discard their masks with proof of vaccination, but if employees choose to keep their masks for the time being, it’s difficult for clients not to view it as a kind of political statement—despite their decisions often being corroborated by local laws.

And, as long as businesses continue to operate within the confines of those laws, their decisions should be free from public scrutiny.

Sadly, that’s not what’s happening as evidenced by the notice posted by the liquor store in Johnson County. The same disparity that allows for some freedom despite COVID still being present in many Americans’ lives often leaves those who choose not to wear masks to conclude that those who do wear them are being judgmental or unnecessarily cautious.

Those judgements work in reverse as well, with businesses who allow their employees to work maskless facing criticism from masked clients. It seems that the freedom to choose—something for which people strongly advocated throughout the pandemic—continues to cause separation.

As businesses change or adapt their regulations to fit state mandates and employee (and customer) concerns, everyone would do well to remember that the decisions these establishments make are usually meant to affect some kind of positive work environment—not to welcome harassment and abuse.

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Business News

You should apply to be on a board – why and how

(BUSINESS NEWS) What do you need to think about and explore if you want to apply for a Board of Directors? Here’s a quick rundown of what, why, and when.

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board of directors

What?
What does a Board of Directors do? Investopedia explains “A board of directors (B of D) is an elected group of individuals that represent shareholders. The board is a governing body that typically meets at regular intervals to set policies for corporate management and oversight. Every public company must have a board of directors. Some private and nonprofit organizations also have a board of directors.”

Why?
It is time to have a diverse representation of thoughts, values and insights from intelligently minded people that can give you the intel you need to move forward – as they don’t have quite the same vested interests as you.

We have become the nation that works like a machine. Day in and day out we are consumed by our work (and have easy access to it with our smartphones). We do volunteer and participate in extra-curricular activities, but it’s possible that many of us have never understood or considered joining a Board of Directors. There’s a new wave of Gen Xers and Millennials that have plenty of years of life and work experience + insights that this might be the time to resurrect (or invigorate) interest.

Harvard Business Review shared a great article about identifying the FIVE key areas you would want to consider growing your knowledge if you want to join a board:

1. Financial – You need to be able to speak in numbers.
2. Strategic – You want to be able to speak to how to be strategic even if you know the numbers.
3. Relational – This is where communication is key – understanding what you want to share with others and what they are sharing with you. This is very different than being on the Operational side of things.
4. Role – You must be able to be clear and add value in your time allotted – and know where you especially add value from your skills, experiences and strengths.
5. Cultural – You must contribute the feeling that Executives can come forward to seek advice even if things aren’t going well and create that culture of collaboration.

As Charlotte Valeur, a Danish-born former investment banker who has chaired three international companies and now leads the UK’s Institute of Directors, says, “We need to help new participants from under-represented groups to develop the confidence of working on boards and to come to know that” – while boardroom capital does take effort to build – “this is not rocket science.

When?
NOW! The time is now for all of us to get involved in helping to create a brighter future for organizations and businesses that we care about (including if they are our own business – you may want to create a Board of Directors).

The Harvard Business Review gave great explanations of the need to diversify those that have been on the Boards to continue to strive to better represent our population as a whole. Are you ready to take on this challenge? We need you.

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