Equity Crowdfunding 101 with Guest Blogger Max Rich of Republic

This week, the ladies of Smith Shapourian Mignano PC are proud to collaborate with Maxwell R. Rich, Esq., Internal Counsel and Deal Team member at Republic, the equity crowdfunding portal. 

Republic is an investment platform where everyone can invest as little as $10 in innovative startups curated by their team; it is a community empowering founders and giving everyone the chance to be an angel investor. Republic was founded and built by AngelList alumni who believe angel investors are the catalysts to change in the world. 

As counsel for Republic, Max guides companies through the crowdfunding process, coordinating the regulatory and compliance needs of the platform with the securities laws filings the companies must make to raise funds. For the purpose of this blog, we feature Republic's previously published blog, which discusses how equity crowdfunding can open up news investment opportunities to all and provide capital to underserved founders.

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New Impact, New Inclusion in Equity Crowdfunding

It’s a big step forward in the third wave of democratizing startup financing. The first wave began with reward-based crowdfunding portals like Indiegogo and Kickstarter, where people everywhere could help fund product development with a donation.

The next wave, known as Title II crowdfunding, sparked a breakthrough change. Connecting angel investors with founders, the online fundraising platform AngelList has syndicated over $350M into more than 1,000 startups since 2013.

Yet that second wave harnesses only a fraction of equity crowdfunding’s potential. Available to wealthy “accredited investors” only, it leaves out 97% of the US population, thereby limiting the opportunity for a fuller range of startups, founders and investors to engage with one another.

Today, investment in private companies leaves out 97% of the US population as potential investors. Republic addresses that limitation. On Republic, entrepreneurs can access a vast new source of capital: investments from the general public. And everyone — from Main Street to Wall Street — can share in the potential success of innovative startups they choose to back.
This is a big step and it hasn’t come easily. After years of lobbying effort, angel investing became legally accessible to main street for the first time this year thanks to the approval of Title III legislation. It will take partnership and perseverance to convert this policy shift into a market reality at scale.

From Main Street to Wall Street, now everyone can participate in the journey of a new startup.

Republic’s Vision for Entrepreneurs

Opportunities await in gaps, and this gap is huge. For startups, Republic is a gateway to a vast source of capital, but that’s not all. Investment crowdfunding also presents a tremendous marketing opportunity, through which a startup can convert casual customers and supporters into loyal brand ambassadors. Indeed, angel investing is about building a support network as much as it’s about operating capital.

Imagine if you converted your casual customers and supporters into loyal brand ambassadors?Republic brings together experienced angels, influencers and industry experts to help mission-driven entrepreneurs plan and execute a crowdfunding campaign. Beyond that, we’re here as a resource and a support network. The Republic team are intent on a single purpose of using our knowledge — ranging from growth hacking to coding to lawyering — toward easing the path for other entrepreneurs.
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This is the opportunity, and hope for the future, that Republic addresses.

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Smith Shapourian & Mignano, PC is available to answer any questions or concerns you may have regarding equity crowdfunding.  Max can be reached here.
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This blog does not constitute solicitation or provision of legal advice, and does not establish an attorney-client relationship. This blog should not be used as a substitute for obtaining legal advice from an attorney licensed or authorized to practice in your jurisdiction. You should always consult a suitably qualified attorney regarding any specific legal problem or matter in a timely manner, as statutes of limitations may bar your claim.