Community Capital for Real Estate Seth Wilson seth@cuttingedgecapital.com
Investment Crowdfunding = Community Capital A true investment: investors can get their money back plus a return You decide what to offer your investors Open to accredited and non-accredited investors Can be advertised (general solicitation) Community capital happens when investment crowdfunding is focused on a community (whether geographically defined or affinity-based) Community Capital
Why Community Capital? Bypass institutional gatekeepers and go straight to people who care Engage your community Democratize finance: Everyone can participate on a level playing field Keep money circulating in your community Community Capital
6 Legal Strategies for Community Capital JOBS Act Title III Exempt Crowdfunding State-specific Exempt Crowdfunding Nonprofit DPO Intrastate DPO Rule 504 DPO Reg A DPO (Tiers 1 and 2) Community Capital
Two Ways to Access Community Capital Directly for a specific venture or project Indirectly via a community investment fund Both can raise community capital via the same offering strategies, but a fund needs to consider an additional layer of regulation Community Capital
Community Real Estate Investment Funds Legal requirements Fund is primarily in the business of real estate acquisitions or mortgage loans Investors can’t have a right to redemption (but fund can consider redemption requests) Community Capital
Securities Offering Process 1 Compliance review and cleanup 2 Decide what kind of investment to offer: Debt, equity, revenue share, etc. 3 Decide on legal compliance strategy 4 Prepare offering documents 5 Prepare and submit application to regulators (if needed) 6 Work with regulators until permit is issued 7 Launch offering and bring in investment Community Capital
Our Mission At Cutting Edge Capital, our mission is to help build a more equitable, inclusive and resilient economy that works for everyone. In the economy we envision: Leaders can raise capital from their own community Everyone can invest locally or in something meaningful Money circulates in the community The community builds wealth organically through a cycle of investment, growth, profit, and reinvestment. Community Capital - April 26, 2017
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