Crowdfunding in North Carolina For North Carolina Businesses
The NC PACES Act was signed into law in July 2016. This new law enables NC businesses to raise funds to grow their businesses. (Read the FAQs on this act.) While the act opens the door to fundraising, you still have to do your homework. This includes:
- develop a funding strategy;
- what will be exchanged for the funds – equity? debt? convertible debt?
- how much do you need to raise?
- will there be a tax impact (the new IRS guidance on taxability of certain crowdfunding proceeds);
- develop a budget and detail how the funds will be used;
- explain how the funds will help you accomplish your goal – grow the business, buy new equipment, open a new location, etc.
- create a list of potential funders – accredited and non-accredited located in North Carolina;
- be sure that your business will meet the criteria and requirements of the NC PACES act at the time you raise the funds.
For entrepreneurs and new businesses, you will want to spend time developing your business concept, market information, and business model.
Make a Great First Impression
As the saying goes, you get one chance to make a great first impression. This is especially true when you are seeking investors. You get one chance to make the case for why they should invest in YOU and YOUR Business. If you want to use OPM (other people’s money) to grow your business, then you have to present the evidence that makes your case. So your pitch, campaign, product, team, and business model have to answer the investors’ FAQs. The investor FAQ’s are the formula for making a great first impression. The FAQs fall into the following categories:
- the offer – terms and valuation;
- business model – how you make money;
- competitive advantage – why customers will buy from you and not your competitor
- the opportunity – who the customer is and what motivates them to buy (also how many)
- financials – what you’ve done, what you can document you will do in the future and…
Well, there is much more, and lots of detail in those broad categories., but you get the idea. So, what does the FOCUS PACES program do? The program guides you to develop the answers to the FAQs. It will put you through your paces to your pitch book, the story you will tell, and work with you to document your case for investment.
How the F.O.C.U.S. PACES Program works:
F.O.C.U.S. Resources works with our client companies in our PACES program through:
- workshops and webinars:
- key aspects of starting a business;
- funding strategy;
- sources and uses of funds;
- financial forecasts and budgets;
- CORE Genesis elements
- CORE Growth elements
- small group work sessions; and
- one-on-one sessions.
Free NC PACES Crowdfunding Phone Consultation and Application/Questionnaire
Want to ask some questions about our program or crowdfunding in general? Sign-up for a one-on-one phone session.
Articles and Podcasts
- Crowdfunding: The Taxman Cometh (8/25/2016) - Crowdfunding - Category Determines Taxation Crowdfunding, like campaigns you see on sites like Kickstarter or GoFundMe, can essentially be categorized into three types of transactions: Equity investment – the funds received purchase ownership interest. Gift – the funds received are given with no expectations of a return and a token gift is given in return (e.g., a t-shirt or mug) Income – money received for your work. What most crowdfunding groups or individuals forget to consider are the tax implications of their efforts. It’s crucial that you can answer the following questions about the proceeds from your crowdfunding: What category ...