There’s no question there is big money in crowdfunding. But how do you get paid LEGALLY in the industry? It is not as simple as it sounds. There are rules that, if not followed, can land you in big trouble with the SEC! In this podcast, Small Cap Equity Advisors CEO Mike Brette goes over all the do’s and don’ts that you need to be aware of if you want to make a living raising capital for businesses, including the 4 main issues that ping the SEC with red flags – and if there’s one takeaway from all this, it’s that “success fees” to unlicensed finders are not the answer!
While many tend to ignore the rules of raising capital, when it comes down to it, there are only 2 ways to do so legally: either with a full blown registration with the SEC under S1 or to do a registration exemption, such as crowdfunding. While this is cut and dry, many simply do not want to follow the rules and often learn too late about the severe consequences of such foolishness. You DO NOT want to get on the SEC’s radar, for sure! So how do you get paid for your efforts in the crowdfunding industry? Listen to this podcast as Mr. Brette breaks it all down for you, and as usual, holds nothing back!
As mentioned on the podcast, a FINRA licensed investment bank is the only way to raise money legally. If you are unlicensed and without an affiliation with a broker/dealer, you are in violation of the law, and both you and an issuer can face criminal penalties by state and federal legislative agencies for violating securities laws. And guess what the penalty for that is?
What about marketing fees? Mike goes into that as well. Any “success fees” paid to an unlicensed finder is illegal. While some “smart” issuers and finders try to possibly circumvent the rules through marketing agreements and so-called “Simple Agreement for Future Equity” (SAFE) documents, always remember that the courts are packed with people who thought they are smart enough to beat the system.
Then there’s the area of blockchain, tokenization, security token offerings (STOs) and cryptocurrencies and how they all apply to securities. The bottom line is after listening to this podcast, you’ll learn what to do and how to earn money legally in the crowdfunding industry, and what can get you in trouble. Questions? Comments? Bail money? (lol!)… Mike Brette can be contacted directly by phone at 951-236-8473 or by email here. Remember: just because someone doesn’t get caught robbing a bank, doesn’t make bank robbery legal. Make sure you’re doing everything the right (and legal) way!
ABOUT OUR GUEST: Mike Brette
Michael N. Brette, J.D. advises clients on a wide variety of transactional business matters from startup consulting, Equity Crowdfunding, 506(c) private placement, REG A+ offerings, capital formation, going public, arranging capital for publicly traded companies.
Mr. Brette has published two books Asset Protection Planning and Raising Capital For Your Business (Amazon). He has appeared on more than 450 TV and radio shows discussing various business and financial topics. He has a Juris Doctor (law degree) for 42 years and is listed in Who’s Who in the World and Who’s Who in Industry & Finance.
All information provided is for informational purposes only. Mapable USA is not a registered broker-dealer, funding portal, or investment advisor. This information presented on this website/podcast is not intended as legal or investment advice for anyone to make an investment in any particular company and is not intended for any companies to rely on this information to form an opinion to go public or not to go public or to do any type of offering of securities. Any information presented is not an offer or solicitation to purchase or sell any securities or financial products. None of the information on the Mapable USA podcast or website takes into account any individual person’s personal objectives, financial situation, needs, or particular circumstances. You must check with a securities attorney to find out if an offering is for you, or if you are going to be in the business of selling any type of securities, you need to make sure you are following your state and federal legislative law so you do not get into any troubles. Do not use the opinions as stated on this show as any way to form an opinion as what is wrong or right or what could be done for your business or as an investor. Mapable, LLC recommends you obtain your own financial, legal, and taxation advice before making any financial investment decision.