Growth Companies Benefit From Final Crowdfunding Rules

December 8th, 2015 | Posted by Sarah Jones in Guest Blogs - (Comments Off)

This week on NVTC’s blog, Alex Castelli of NVTC member CohnReznick shares how the SEC’s adoption of new crowdfunding rules could be a game changer for growth-focused businesses and investors.


The SEC’s adoption of new crowdfunding rules could be a game changer for growth-focused businesses and investors

On Oct. 30, 2015, the SEC approved final rules that permit companies to offer and sell securities through crowdfunding. The new rules provide another capital raising option for growth-oriented companies and offer additional options for investors who want to get in on the ground floor of in what could be a very successful business.

Benefits to Companies and Investors

Some of the key benefits of the SEC’s rules permitting crowdfunding or, simply put, the ability of companies to raise capital from the general public through the Internet are listed below.

  • Early-stage and growth companies that may be unable or unwilling to raise capital from institutional or private investors have access to another source of capital.
  • By offering and selling equity in their company through the Internet, companies gain a wider and more efficient distribution of the offering to a larger audience when compared to traditional sources.
  • Using the Internet to offer and sell securities should decrease the cost of capital
  • Non-accredited individual investors, previously excluded from equity crowdfunding investments, are now invited to become investors with certain limitations.
  • Investors have a level of protection since companies raising capital through crowdfunding will be required to utilize funding portals or registered broker dealers and will have certain disclosure requirements to investors. Additionally, funding portals that wish to participate in the crowdfunding process as an intermediary will be required to register with the SEC and become a member of FINRA.

Launching Your Crowdfunding Campaign

Even if you are a tremendously successful owner or executive, a successful crowdfunding effort will require expert marketing surrounding your efforts to raise funds. You and the members of your management team will assume the responsibility of formulating a marketing campaign to create interest in your offering. You’ll need a good story to tell investors complete with business plans, financial statements and projections.

In the crowd, you’ll be competing for investment dollars with other companies so you need to engage in strategies to elevate your offering over all others. Earning the trust and confidence of investors can lead to a successful offering. Consider activities that could strengthen your relationships with clients, customers, and even vendors. These relationships may help to support a successful crowdfunding campaign and could represent your future investors.

To launch your crowdfunding campaign, you’ll be using the services of an SEC registered broker/dealer or SEC registered crowdfunding platform or funding portal. Each will probably offer different services and fee structures. Once your customers, clients, and vendors have invested in your business, you may want to reach out to a broader base of potential investors. Getting your offer in front of the right investors will be critical to achieving your capital raising goals.

As a private company, you may not be accustomed to sharing operational and financial information publically. A successful crowdfunding campaign may require additional transparency if you are to build trust and confidence in prospective investors. If you are not comfortable sharing company information with the world, you may want to explore a more proprietary method of raising capital.

Once you have executed a successful crowdfunding campaign, you will need to have a plan on how you will continue to communicate to your new investors. How much information are you willing to share? Which rights to information will investors have? Consider creating an investor-only section on your company’s website where you can post periodic information about your company’s progress, financial results, etc. Transparency is the key if you want to keep your investors informed and hungry to make additional investment in the future.

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The best relationships are built on great communication and mutual understanding – which is why the relationship between federal CIOs and the applications that drive their agencies’ performance is getting more complicated. This week on NVTC’s blog, Davis Johnson, the vice president of public sector at NVTC member company Riverbed Technology explains why it’s important to improve your network visibility.


The best relationships are built on great communication and mutual understanding – which is why the relationship between federal CIOs and the applications that drive their agencies’ performance is getting more complicated.Federal leaders are too often in the dark about which applications are delivering value, which personnel are using them, and how those applications are performing. Agencies simply don’t know their apps very well, and understanding applications begins with gaining visibility into the networks they run on.

The network visibility crisis is getting even more serious as agencies move to the cloud and consolidate data centers. The result is that applications are traveling farther distances across agency networks to reach defense and civilian workers that rely on them every day. Agencies need to make sure they have visibility into the new network paths, and roadblocks, that their applications navigate, or face negative impacts to performance and budgets.

In a Riverbed-commissioned survey conducted by Market Connections, over 50 percent of Federal IT respondents reported that it takes a day or more to detect and fix application performance issues. Furthermore, only 17 percent reported being able to address and fix the issue within minutes.

The costs associated with network outages can be staggering. Today, the average cost of an enterprise application failure is $500,000 to $1 million per hour. This is why it is so important to have good network visibility to identify and fix network and performance application problems as they occur.

Many federal IT executives lack the manpower, budget and tools necessary to find and fix performance issues quickly and efficiently. Without the right tools to monitor network and application performance, federal IT professionals cannot pinpoint problems that directly lessen agency or mission effectiveness. This can mean supply chain delays of materiel to warfighters in the field or lack of access to critical defense and global security applications.

Networks need to perform quickly and seamlessly in order to fulfill mission requirements. Performance monitoring tools provide the broadest, most comprehensive view into network activity, helping to ensure fast performance, high security and rapid recovery.

With visibility across the entire network and its applications, IT departments can identify and fix problems in minutes—before end users notice, and before productivity and citizen services suffer. More than two-thirds (68%) of respondents see improved network reliability as a key value of monitoring tools and more than three-quarters (77%) of respondents said automated investigation and diagnosis is an important feature in a network monitoring solution.

Survey respondents shared which features are important in network monitoring, providing a window into their thoughts about current issues. Those features, listed in order of importance, are capacity planning (79%), automated investigation (77%), application-aware visibility (65%), and predictive modeling (58%).

By improving network visibility, an agency will have improved network reliability, know about problems before end-users do, experience improved network speed, maximize employee productivity, and gain have insight into risk management/cyber threats. Because IT executives will be able to see an agency’s whole network, they can become proactive in not only fixing issues but avoiding them as well.

With today’s globally distributed federal workforce, network visibility is critical to monitoring performance, and identifying and quickly fixing problems.

Using network monitoring tools is a critical step toward managing the complex network environment and ensuring transfers to the cloud are effective and beneficial experiences for the agency, the end users and, ultimately, the constituents.

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NVTC is inviting members and industry leaders to serve as guest bloggers, sharing insights and information on trends or business issues relevant to other members. This week, the NVTC Digital Strategy Committee writes about the group’s recent event on digital strategy and public safety, featuring Fairfax City Fire Department Chief Richard R. Bowers, and how it revealed several very interesting and useful challenges for the NOVA business community.


The Northern Virginia Technology Council’s (NVTC) Digital Strategy Committee (#nvtcdigstrat) recent event regarding Digital Strategy and Public Safety, featuring Richard R. Bowers – Chief, Fairfax Fire Department – revealed several very interesting and useful challenges for the NOVA business community.Not least of which was the current challenges around focused, resourced digital strategy planning across the County constituent agencies, and among local jurisdictions.Many targeted capabilities and improvements in “front-end” digital tools, outreach and engagement, plus initiatives on the “back-end” to handle system-specific data and information management are certainly underway, but information-sharing among the public safety stakeholders – businesses, government and the public – remains a strategic planning, governance and education hurdle to address. In other words, a B2G2C digital strategy challenge.NVTC Digital Strategy with Fairfax Fire Chief Richard Bowers

“Simplicity” was a key concept – that seems hard to maintain in the first responder settings, particularly with the profusion of both new technology equipment and situational data. Chief Bowers illustrated the challenge with local EMS responders – on route or on scene -having to quickly use and interact with at least 5 separate kinds of equipment:

  • EPCR (Electronic Patient Care Reporting)
  • CAD (Computer Aided Dispatch)
  • MDC (Mobile Data Computers)
  • NCR (National Capital Region) Patient Tracking System
  • Mobile Phones, iPads and Radios

The variety of interfaces, variety of data granulation, variety of authentication methods – it all adds up to what can be a burdensome expectation on responders, which creates higher risk in areas of data quality and security, process coordination and mission efficiency. This hinders, therefore, the ability of the entire responder community to deliver optimal outcomes – in spite of the number and types of technologies available and in use.

Furthermore, as the technologies available to both the responders and the public become more pervasive, easy to operate and use – for collecting or contributing incident reporting, sensory feedback and overall situational awareness data – it’s simply too difficult to add these inputs to the mix in a way that avoids information overload, or worse, information degradation or errors. There’s no common information architecture that anticipates a proliferation of device inputs, mobile and social channels.

A standard “dashboard” visualization service for use in the field, to quickly access the various systems and growing information sources, was also mentioned as a highly-desirable capability – particularly a dashboard to sensitive systems and protected information in a BYOD environment – i.e. on personal cellphones or tablets. A related need surfaced above the actual dashboard of the response vehicles and fire engines – actually having “heads up” display on the windshield of incident information, particularly GPS and route data.

Fairfax 2015 Police and Fire Games

The Committee was also briefed on the upcoming World Police and Fire Games, coming to Fairfax County at the end of June this year (2015). It’s anticipated that over 12,000 athletes and family/guests (over 30,000 in all) will attend the games, and that Fairfax County will experience tremendous global attention, regional pride and local economic benefit from hosting the event. Over 2000 volunteer slots remain open, along with many sponsorship opportunities for businesses, organizations or individuals. The Fairfax 2015 Games Website maintains all information for athletes and all other participants, from local accommodations and event venues, to a robust social community and online marketplace.

The NVTC Digital Strategy Committee looks forward to more collaboration sessions with the Northern Virginia public safety and First Responder community, and will continue to support information-sharing about B2G2C digital strategies.

Thanks to the NVTC event sponsors, speakers, coordinators and volunteers, including:

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