Equity Crowdfunding is about to

undergo a major facelift

opening up investment in private companies will

help diversify the types of companies that get
funding. It will also help develop a more diverse
group of investors.

ERIN GLENN, CEO, QUIRE

ON TREND . SOPHISTICATED . FASHION FUND

Who We Are

Rockstar team from Estee Lauder, McKinsey etc.

Many collective exits
Deep background in regulatory compliance
Understand the business of fundraising
Plan to specialize in Regulation A+

Startup investing: no longer just for rich

On Oct 30, the SEC finalized rules to give regular people
the opportunity to make investments previously limited
to big-money folks.
SEC voted 3-to-1 to open up equity crowdfunding to a
much wider group of people. Startups will now be able
to raise up to $1 million a year via online platforms.
At the center of the change is the JOBS Act, which
passed three and half years ago with bipartisan support
in Congress. Much of the law has already been
implemented.

Power to the People

Commissioner Kara Stein noted that the SEC will
conduct a three-year study to evaluate how
crowdfunding develops. "Let's see how this experiment
works," she said.
Supporters of the JOBS Act say the change will level the
playing field for investors, while also giving startups the
ability to raise money from more people.
Critics fear the requirements for startups seeking
investment will be too demanding, or that unschooled
investors could lose their money.

Title III Differences

Startups have already been using equity crowdfunding
companies like SeedInvest, Fashion Fund and CircleUp to
raise capital -- but only from "accredited investors."
businesses looking to raise $500,000 or more will be
required to have financial statements reviewed by an
auditor.
Those raising between $100,000 and $500,000 must
do outside financial review, but it doesn't have to be
audited. And companies seeking less than $100,000 can
submit their own statements.

Title III: The Diversity Antidote

Lack of diversity starts with venture capital firms. In
the tech community, VCs are the arbiters of what
lives by deciding who gets funded.
Study after study has shown that VC firms are
largely run by White/Caucasian men. Merely 8.2% of
VC firm decision makers are female, and roughly 2%
are Black or Latino.
Wielding this power, VCs tend to fund founders who
solve problems they can most relate to, and who are
demographically similar to themselves. This has led
to female and minority-founded businesses being
vastly underfunded.

Title III: Diversity Data

Data curated from Mattermark and Quires recent Startup Investing Survey

Title III: The Qualification Delta

Lots of highly educated people cant invest under
current laws. This inconsistency is irreconcilable,
especially in light of what motivates people to invest.
Of the respondents with a bachelors degree, 70%
cant invest, and of those with a postgraduate
degree/certification (e.g. PhD, MBA, JD, CPA, MD),
47% cant invest.
While deemed competent to provide advice to others,
these people are deemed incapable of making
investment decisions for themselves, or at least of
being held responsible for their decisions.

Title III: Qualification Delta

Data curated from Mattermark and Quires recent Startup Investing Survey

Title III: Investor Financial Knowledge

Data curated from Mattermark and Quires recent Startup Investing Survey

Title III: Investor Motivations

No doubt, people invest to make a financial return.
94% of our respondents marked that as a reason.
70% of respondents had additional motivations for
investing. For them, investing isnt where they either
make millions or they lose.
For instance, the majority of our respondents would
also invest to support a companys mission and
founders. And nearly half would invest to spur
innovation and job creation.
These motivations arent surprising.

Title III: Investor Motivations

Data curated from Mattermark and Quires recent Startup Investing Survey

Title III: Conclusions

The SEC should certainly implement appropriate
safeguards to protect investors, but we urge them to
meet their mandate and allow everyone to invest in
startups by finalizing Title III.
We hope these results helped shatter some of the
myths that are used to support the current
prohibitions. And we hope that they shed light on the
great impact that Title III can have when its finalized.

WHY

Fashions fade. Style is eternal

YVES SAINT LAURENT

Equity Investors by Category

Data curated from Mattermark and Quires recent Startup Investing Survey

Equity Crowdfunding for the Creative Class

Only viable source of equity funding for most fashion,
design and hardware deals
Significant upfront costs are required to finance the
production over a period of months/years
Revenues will not be generated until the production
is complete
Investment is highly speculative (no guarantee that
the production will be a hit, however well made)

Equity vs. Debt

A means of raising funds to support the development of a
business through the issue of shares in return for money
Benefits
Money doesnt need to be paid back
Investor may bring added value to the business through
their knowledge/ contacts etc
Risks
Loss of control
- investor may influence the direction that the business
takes in order to maximise the potential return on their
investment
- once youve issued shares in your business, you may not
be able to control how these are subsequently traded

What Investors Look For

Growth potential the business must be scalable
Market opportunity is there a market for the product/
service?
Protection of assets - is their any IP in the business, and how
will this be protected?
You who are the people behind the business? Are they
investable? Have they got the drive, commitment and skills
necessary to take the business forward?
Return on investment how much money can I expect to make
from the sale of my shares in X years time, if all goes to plan?
Risk what is the likelihood of this business failing to achieve
its financial projections?

Success is not a random act. It arises out of a

predictable and powerful set of circumstances
and opportunities.
`

MALCOLM GLADWELL