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Working For the Success of Every Fundraiser and Their Supporters, By Providing Education, Resources and Assistance to All Stakeholders in the Crowdfunding Community
The Crowdfunding Professional Association (CfPA), the federally-recognized, not-for-profit, 501(c)(6) trade association for all stakeholders in the Crowdfunding industry, is pleased to announce the publication and availability of a recommended Termsheet template for use by participants in JOBS Act Title III (Section 4(a)(6)) Crowdfunding equity offerings. This effort reflects the CfPA’s core mission of promoting the success of all stakeholders in the Crowdfunding community, and addresses several of the potentially important reservations expressed by some about Title III Crowdfunding. For more information about this recommended Termsheet template, the CfPA itself or Crowdfunding in general, please consider attending the Education Summit being held in Washington, D.C., on 9/30 and 10/1/14 (https://www.eventbrite.com/e/cfpa-education-summit-tickets-12689010171).
Major provisions of this recommended Termsheet template include:
Definition of Title III Crowdfunded equity transactions as providing a separate class of Crowdfunding (“CF”) security, distinct from Common shares or other ownership units (to allow the recognition and separate treatment of Crowdfunded security holders.)
Cancellation by either prospective investor or issuer, for any reason whatsoever and at any time prior to closing, of all commitments to invest or offer and full refund of any funds proffered (to mirror usual practice in private security offerings, and prevent any participant from being locked into a pending transaction that they may have come to regret.)
Ability of a supermajority of holders of CF equity, by vote proportional to ownership interest, to decide all issues pertaining to the CF security class (to preclude impeding a future transaction of the company by inability to communicate with or obtain consent from a minority of holders, or to simplify the Cap Table by allowing aggregation of all CF interests into a single holding entity.)
Anti-dilution protection for CF investors (a critical and essential safeguard for all equity holders.)
Legal documents incorporating above concepts appropriately to each specific issuer and fundraise must be prepared by competent legal counsel. However, the Crowdfunding Professional Association recommends that investors not participate in raises that do not include and reflect the above-described terms that are considered essential to the protection of both investors and issuers.
The Crowdfunding Professional Association email@example.com
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