With Regulation A+ of the JOBS Act coming into effect, private companies in the US are now enabled to raise up to $50 million from non-accredited investors. The regulation expands this type of investment from what had previously only been open to accredited investors and institutions. As a result, the first wave of firms to jump into the water, taking advantage of the new laws are equity crowdfunding platforms that match investors and startups seeking funding.
Using the occasion to not only state its intentions to offer equity crowdfunding to non-accredited investors but also launch its own fundraising campaign, is Onevest. The firm operates an equity crowdfunding platform with Onevest brand, as well as running CoFoundersLab, a social networking site to help entrepreneurs meet co-founders for their new projects. Connected to the early evolvement of startups, CoFoundersLab is also a provider of potential deal flow to the Onevest crowdfunding platform.
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Speaking to Alejandro Cremades, Co-Founder & Executive Chairman at Onevest, he explained to Finance Magnates that they plan on raising between $2 to $4 million in a Series A round with a pre-money valuation of $16 million. According to Credmades, he stated that although the firm already had demand from professional investors, they wanted to launch a portion of their fundraising to investors on the Onevest platform. The combination of sourcing financing from both the crowd and experienced angel and venture firms is gaining traction in the startup industry, as it widens the amount of stakeholders that can assist companies.
In relation to the benefits of Regulation A+, Cremades explained that “it opens open up a total new face of investors that that can invest into startups.” He added that with 65% of new jobs being created by small businesses, there is an economic benefit to the US by enabling private firms new sources to raise capital.
In terms of startups, Cremades believed that crowdfunding solves a difficult problem that startups face, as it saves them time when raising funds. Specifically, Cremades explained that rather than being required to spend months educating potential investors about their startups, founders can focus their efforts on crowdfunding platforms that are open to many investors.