raising community capital using

Raising Community Capital

using DPOsCuttingEdgeCapital.com

@CuttingEdgeCap@JennyKassan

OaklandPinball

Pinball

Impact Hub

LaurelBooks

Issues

25th St.

Collective

New Parkway

RockPaper

Scissors

Awaken

Red BayCoffee

Local wealth: $1

$

Impact Hub

LaurelBooks

Issues

25th St.

Collective

New Parkway

RockPaper

Scissors

Awaken

Red BayCoffee

Local wealth: $2

$

Impact Hub

LaurelBooks

Issues

25th St.

Collective

New Parkway

RockPaper

Scissors

Awaken

Red BayCoffee

Local wealth: $3

$

Impact Hub

LaurelBooks

Issues

25th St.

Collective

New Parkway

RockPaper

Scissors

Awaken

Red BayCoffee

Local wealth: $4

$

Impact Hub

LaurelBooks

Issues

25th St.

Collective

New Parkway

RockPaper

Scissors

Awaken

Red BayCoffee

Local wealth: $5

$

Impact Hub

LaurelBooks

Issues

25th St.

Collective

New Parkway

RockPaper

Scissors

Awaken

Red BayCoffee

Local wealth: $6

$

Impact Hub

LaurelBooks

Issues

25th St.

Collective

New Parkway

RockPaper

Scissors

Awaken

Red BayCoffee

Local wealth: $$$!

$

Securities Law 101

Kansas Adopted the First Securities Law in 1911

Federal securities laws were adopted in 1933 and 1934

Crowdfunding vs. Securities Offering

VS

Basic Rules:

1. You must register with the state and federal government before you can offer or sell securities

2. Registration means filing and getting approval for an extensive disclosure document

3. But there are some exceptions to this rule . . .

Accredited Investors

•At least $1 million in net worth excluding primary residence or•$200,000 in annual income•$5 million for entities

Direct Public Offerings

A DPO is an investment offering• Made using public advertising• That allows an unlimited number of

accredited AND unaccredited investors

• Made directly to investors (no middleman)

DPOs are Legal NOW(they have been for decades!)

How is a DPO legal?

1. Federal exemption from registration requirement

• Intrastate

• Rule 504

• Nonprofit

• Farmer co-op

2. State registration (or exemption for co-ops, ag co-ops, nonprofits, etc.)

• Massachusetts Worker Cooperative (conversion from sole proprietorship)

• Offering non-voting preferred stock

• Raised $500,000 from Vermont and Massachusetts residents in 2 months

• Interest paid in credits toward product

• Raising funds from California residents – multi-year offering

• Have raised over $2 million so far

People’s Community Market

• Offering non-voting preferred stock/discount AND gift cards

• 3% annual cumulative dividend with exit after 7 years

Raised $1.2 million!

• Offering common stock• Open to Washington residents• $100 minimum• Raised $750,000 and opened store

• Offering notes to investors in almost all 50 states•$1,000 minimum investment

•Pioneer Valley Grows•Bay Area Food and Farming Fund•Mendocino Economic Development and Financing Corp•Ceednet

Community Funds Coming Soon!

DPOs in Louisiana1. Registration by qualification – requires audited

financials2. Registration by notification – continuous operation for

at least 5 years; positive cash flow; becomes effective in 5 days

3. Small issue registration4. Nonprofit issuer registration – trust indenture,

becomes effective in 5 days5. Securities of agricultural co-ops are exempt

Fee = 1/10 of 1% of the aggregate price of the securities to be registeredMinimum = $100, Maximum = $1,000Plus $250

Where do you find DPOs?

DPO Marketplace

Q & A

CuttingEdgeCapital.com