Equity Financing for Companies & Real Estate Projects Made More Predictable…
Obtaining Equity Capital Financing Under the New Capital Markets Rules
Entrepreneurs, businesses and commercial real estate developers cannot grow without capital. In the past, access to equity capital financing has been extraordinarily limited – supply always being outstripped by demand due to the fact the securities regulations prevented you from aggressively advertising your opportunity.
This limited the pool of prospective investors to private equity funds, angel investors, and your friends and family. Odds were, you would fail.
Capital financing is changing because the rules regarding how businesses, entrepreneurs and developers can address the capital markets, and raise up to $75 million in at-risk equity capital at potentially the lowest cost and risk, were changed in November 2020 by the SEC.
New Rules Create Ideal Opportunity to Obtain Capital
The new rules created pathways for capital financing that change the monopoly that securities broker-dealers, investment bankers, private equity funds and angel investors have enjoyed for decades.
Under the old rules, you begged for their money and they took full advantage of their position. The odds of probability of success became worse than gambling.
The new rules give you the opportunity to sidestep that entire process, increase the probability odds of a successful outcome, and still maintain control of the ultimate profit-taking opportunity your business or project may in fact create, all other things being equal.
Nothing is Free & There Are No Guarantees
Crowdfunding definitely changes the odds in your favor, but nothing is free or guaranteed (there is no such thing). You have to spend money to make money, but you don’t have to try to obtain equity financing using methods where the odds are you are going to fail. Business – like all of life – requires you to take risks without a guarantee of reward.
Crowdfunding provides you with the means to undertake a capital financing with probability success odds that are only exceeded by companies undertaking an Initial Public Offering. The difference is the cost – the crowdfunding approach expectation would be for less than a third of the cost and less than a third of the time that it takes to launch the average IPO (see DERA report from SEC at sec.gov).
Overview of Accelerator Program Key Points
Now that you know, may the odds be ever in your favor by starting with a good-faith cost estimate of what it may take to launch your funding of up to $75 million.