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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

Missing office culture while working remotely? This tool tries to recreate it

(BUSINESS NEWS) This startup just released new software to help you reproduce the best parts of in-person office interactions while you work from home.

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Loop Team product page, trying to create an office culture experience remotely.

Are you over working from home? Feeling disconnected from your co-workers? Well look no further: The startup Loop Team just released a tool that reproduces the office culture experience virtually.

“We’ve looked at a lot of the interactions that happen when you’re physically in an office — the visual communication, the background conversations, the hallway chatter,” said Loop Team’s founder and CEO Raj Singh in an interview with TechCrunch. “[W]e built an experience that effectively is a virtual office. And so it tries to represent the best parts of what a physical office experience might be like, but in a virtual form.”

Singh’s company, founded pre-COVID, is posed as a solution to feeling “out of the loop” while working remotely. During the pandemic, where virtually all of us are working from home, this technology is needed more than ever.

How it works is by essentially recreating an office experience on a virtual platform. Somewhere between Zoom and Slack with some added features, Loop Team lets you know who’s free to chat, who’s in meetings, and allows you to have private discussions using audio, video, and screen share. It’s ideal for working on projects together.

Loop’s layout is unique in the sense that it is designed to show you conversations in a clear, direct way – exposing relevant items and hiding the rest. Also, employees who miss meetings have the ability to review what they missed, making it perfect for companies that hire across time zones.

The platform was made available December 1st free of charge, but Singh is hoping to introduce a paid version next year. Pricing will likely reflect team size and should remain free for teams of 10 or less.

I’m a big fan of software that allows you to feel closer and more connected to your co-workers. Do I think anything will ever compare to a true, in-person office experience? Definitely not. That being said, I value this kind of progress, especially since I don’t think office culture en mass will make a return any time soon, regardless of vaccinations.

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Business News

MIT report reveals serious flaws in US unemployment system

(BUSINESS NEWS) In the wake of COVID-19, the US unemployment system is floundering to cover all who need the aid but it comes with serious flaws.

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Stressed couple discussing options during unemployment in dimly lit room.

Last week alone, nearly 1 million Americans filed for unemployment benefits. Now that it’s urgently needed, this safety net is full of holes, leaving many Americans in freefall.

A newspaper from the Massachusetts Institute of Technology has highlighted several of the critical weaknesses in our country’s unemployment social safety net.

The report outlines how benefits fall short in three major ways: Duration, eligibility, and payment amounts.

The historical purpose of the benefits system was to replace half of lost wages for 6 months while they looked for another job. (The MIT paper even suggests that a more appropriate “replacement rate” would be higher than that.)

As of 2018, unemployment payments only cover Americans for one-third of their lost wages on average.

The income caps for these benefits have stayed fixed while wages have increased over time. That’s bad enough without considering that wages haven’t nearly kept up with worker productivity in the US, meaning those caps haven’t kept up with the real worth of those workers at all.

Compared to other developed nations, the US has lagged behind in public benefits since well before the pandemic.

In 2014, the Organization for Economic Co-operation and Development compared the duration of unemployment payments around the world. Out of 34 developed countries, the US ranked 33rd— offering less than every country on the list but Hungary.

To quote the research brief for the paper: “Even aside from changes driven by technology and trade, employers’ increasing reliance on contract workers and on-demand scheduling rather than on permanent employees who work predictable schedules has added to the precariousness of many workers’ jobs.”

And those economically vulnerable groups who need the support most are more likely to have jobs that aren’t covered under federal unemployment eligibility.

This includes gig workers (thanks to prop 22), part time workers, and the self employed: People often work these jobs due to constraints like parenthood or disability.

The CARES Act, which passed in April, temporarily allowed certain groups who would usually be ineligible, like the self employed (who are poised to grow in numbers as the job shortage persists) to collect unemployment benefits.

But CARES and HEROES are going to end in December, taking the extensions to unemployment, the eviction moratorium and the COVID sick leave requirements with them.

And instead of extending them, Congress may soon be looking to cannibalize those programs and their unused funds for another round of corporate stimulus spending.

But if the coronavirus relief acts are allowed to expire, nearly 14 million Americans will lose the aid that they provide.

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Business News

Tis the season for employment scams – here’s what to look out for

(BUSINESS NEWS) Fueled even further by COVID unemployment numbers, seasonal employment scams are back on the menu. Here’s how you can avoid them.

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A serious man considers a clipboard in potential employment scams.

With the sheer amount of desperation people are feeling these days, it’s only fitting that employment scams would see a resurgence this holiday season. Thanks to the Better Business Bureau, there are some clear warning signs that can help you spot and avoid seasonal scams this year.

The typical crux of any employment scam revolves around a prospective employee’s willingness to pay for something upfront, be it training or some other kind of quasi-justifiable item (e.g., a uniform). However, other iterations of the scam actually involve an “employer” overpaying for something at the onset—albeit with a fake check—and then asking the recipient to wire “back” the extra money.

Either way, these scams can leave you jobless and with less money than you initially had, so here are some things for which you should watch out.

Firstly, employers shouldn’t ever charge you before hiring you. Some industries do require employees to make small purchases on their own dime (i.e., the aforementioned uniform), but payroll will usually deduct the cost of these materials from the employee’s first paycheck—not require payment upfront.

As a general rule, it’s probably best to avoid companies that charge you at all. Aramark, for example, is known for requiring employees to buy company clothes—and they’re no peach to work with. But desperate times may warrant an exception in this regard.

It’s also to your benefit to avoid postings that boast an “interview-free” experience. Put simply, no one is hiring sans an interview unless it’s nepotism or a scam. If you aren’t related to the poster, that doesn’t leave much up for interpretation. Similarly, advertising a large sum of money for disproportionately low amounts of work is a pretty big warning sign–again, in this economy, people aren’t shelling out for packing or wrapping jobs.

Finally, watch out for jobs that ask for a work sample before hiring. While this is common for internships, most entry-level positions aren’t going to require you to complete a project for free before determining whether or not you’re good for the job. At best, this is a tactic to get free work from you; at worst, your application information can be stolen.

It’s sad to think that people would stoop to the level of scamming others amidst the dumpster fire of a year it’s been, but if you avoid these red flags, you should be able to keep yourself safe during this holiday season.

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