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Interested to Back A Startup Form
Invest in, Loan to, License from, Provide Services to or Mentor Entrepreneurs
Accredited Investor Application – Click Here
I’m a sophisticated investor or an accredited investor interested in Micro Investments
A “sophisticated investor” as an individual whose net worth does not exceed $1 million, who has substantial investing experience, and who can make financial decisions without others’ input.
An “accredited investor” is defined as an individual with a net worth of more than $1 million dollars or a minimum annual income of $200,000.
How individuals and communities can profit from local investing
In the wake of the financial crisis, investors are faced with a stark choice: entrust their hard-earned dollars to the Wall Street casino, or settle for anemic interest rates on savings, bonds, and CDs. Meanwhile, small businesses are being starved for the credit and capital they need to grow. There’s got to be a better way.
In Locavesting: The Revolution in Local Investing and How to Profit from It, Amy Cortese takes us inside the local investing movement, where solutions to some of the nation’s most pressing problems are taking shape. The idea is that, by investing in local businesses, rather than faceless conglomerates, investors can earn profits while building healthy, self-reliant communities.
About Impact Investing: Transforming How We Make Money While Making a Difference
This groundbreaking book charts the path of a new industry, explaining how impact investing is and can be a positive disruptive force. Impact Investing affirms that it is possible and desirable to address social and environmental problems with investments that generate financial profits. Antony Bugg-Levine and Jed Emerson reveal how impact investing is a transformational vehicle for delivering blended value throughout the investment spectrum. The authors give a name to a set of activities previously siloed in enclaves and reveal how these activities are linked within what is becoming a new and dynamic field. Ultimately, Impact Investing offers a fundamentally optimistic vision about what can be achieved when all our assets work in unison with our values and beliefs. (Jossey-Bass 2011)
What is the survival rate for new firms?
Seven out of 10 new employer firms survive at least 2 years, half at least 5 years, a third at least 10 years, and a quarter stay in business 15 years or more. Census data report that 69 percent of new employer establishments born to new firms in 2000 survived at least 2 years, and 51 percent survived 5 or more years. Survival rates were similar across states and major industries. Bureau of Labour Statistics data on establishment age show that 49 percent of establishments survive 5 years or more; 34 percent survive 10 years or more; and 26 percent survive 15 years or more.
Source: U.S Dept. of Commerce, Census Bureau, Business Dynamics Statistics; U.S. Dept of Labour, Bureau of Labor Statistics, BED.
Reference Startup Survival Rates
A high percentage of start-up firms fail within the first few years. A key issue for women-owned firms is their likelihood of remaining in business over time. Data from the SBO were combined with the Business Information Tracking Series (BITS) to provide a unique source of information on the expansion, contraction, and death of establishments during the 2002 to 2006 time period. These data allow us to compare survival rates by gender over a four-year time period. Table 4 shows that 72% of men-owned firms that were operating in 2002 were still in operation in 2006, whereas only 66% of women-owned businesses had survived.
The SBO and BITS data include all firms in existence in 2002, regardless of when they were started.7 It also is interesting to look at survival rates only among new start-ups. A study by Robb and Coleman (2009) which followed only firms that were newly established in 2004 using the Kauffman Firm Survey (KFS) data, showed similar results to Table 4. The authors found that newly- established women-owned businesses had a three-year survival rate of 69.5%, compared to 75.1% for men-owned businesses.
Prepared by the
U.S. DEPARTMENT OF COMMERCE ECONOMICS AND STATISTICS ADMINISTRATION for the WHITE HOUSE COUNCIL ON WOMEN AND GIRLS
October 2010 Rebecca M. Blank
Under Secretary for Economic Affairs U. S. Department of Commerce
Cal-X Crowdfund Rules Summary Review as of February 2012
- Only available to pre-qualified accredited investors via secured password protected sites such as MicroVentures and Gust.com.
- Intermediaries must be registered broker-dealers such as MicroVentures.
- Sites like Caplinked may be used only for organizing documents as an electronic due diligence room. All SEC rules must be followed regarding the offerings associated with the information. The issuer is responsible for meeting this regulations.
- Limited to substantial pre-existing relationships.
- No general solicitation.
- Offerings have to be filed with the SEC and state agencies and must meet all requirements.
- Limited to raising $5 million annually with appropriate filings with SEC and state regulators.
- No more than 499 shareholders or $10 million in assets before having to register as public.
Expected Crowdfunding Basic Rules When Pending Bills Become Law
- Offerings limited to $1 million and will likely require audited financial statements.
- Low income < $50,000 annual income investors limited to $500 per investment with overall cap $2000.
- Medium income >$50,000 <$100,000 annual income investors limited to $1000 with overall cap $4000.
- High income >$100,000 annual income investors limted to $2000 with overall cap $8000.
- Crowdfunding portal must be registered with the SEC and the state.
- Issuer must be incorporated.
- Crowdfunding portal must be open and accessible to public with public communication capability.
- Issue and portal must publish on portal site this information..
- Description of business and business plan.
- Purpose and intended use of offering.
- Ownership, capital structure.
- How the securities being offering are being valued.
- The rights of the securities and how the rights may be exercised.
- Crowdfund portal must provide educational materials to investors.
- Under $500,000 offerings require reviewed financial statements.
- Over $500,000 offerings require audited financial statements.
- The highly risky nature of investing in startups must be made clear to potential investors. They must be warned of high chance to lose all their investment.
- Investors must be warned of the illiquidity of their investment.
- Shares cannot be sold for two years and even then only to other accredited investors following SEC rules (unless the company later files as a public company).
- Shares are restricted and investors must be warned of what restrictions mean to them.
- Crowdfund portals must take reasonable measures to reduce risk of fraud.
- Crowdfund portal must provide SEC with full disclosure of information on all it’s officers, employees and over 20% shareholders.
- SEC will have full investor level access to Crowdfund portal and to issuer websites.
- The target offerings amount and deadline must be published with regular progress updates. No funds can be transferred to issuer from 3rd party funds custodian until 100% of target has been reached.
- Investors can cancel their commitments at anytime up to the full target being reached.
- Crowdfund portal must run background checks on principals of issuer.
- Crowdfund portal and issuer must provide pre-offering notice to the SEC.
- Crowdfund portal and issuer must provide SEC with notice of completion of offering.
- SEC and investors must receive quarterly financial reports from the company.
- Cash management is outsourced to a registered depository institution custodian (not handled by Crowdfund portal).
- Crowfund portal is required to maintain books and records of all transactions fully up to date and ready for SEC audit without prior notice.
- Crowdfund portal is required to make available on its website a method of communication that permits issuer and investors to communicate with one another.
- Crowfund portal cannot provide investment advice or recommendations.
- Investors must certify in writing their annual income and these records must be maintained by the Crowdfund portal and issuer.
- Shares purchased cannot be resold for two years. Certain exemptions will exist for resale to accredited investors as part of an offering registered with the SEC.
- Bad actors as qualified by Dodd-Frank Sec. 926 cannot participate as an issuer, investor, Crowdfund portal or custodian in crowdfunding.
- Crowdfund portal must do a SEC bad actors check on all principals of the issuer ahead of a posting.
- Covered securities should be filed with the state of incorporation of the issue and the state where more than 50% of the capital was raised, if applicable.
- State securities commissions will have jurisdiction to investigate and bring enforcement action with respect to fraud, deceit or unlawful conduct.
- Employees of the Crowdfund portal are prohibited from investing in offerings made through the portal or to have any financial interest in the companies posting offerings through the portal.
- Costs of the offering must be disclosed.
- All rights of investors must be posted.
- Risks to the investor must be disclosed.
- The Crowdfund portal needs to take steps to ensure the investor has the sophistication to understand the risks associated with this class of investment.
Cal-X Self Chosen Additional Requirements for Offering Postings on our future (pending bills becoming law) Cal-X Crowfund Site
- All firms must have a social good purpose as determined through an application process. Reviewed by a Cal-X panel.
- All firms must have at least one endorsing investor with experience in the field in question, that has done due diligence on the company prior to posting with us. The endorsing investor must agree to be identified as such with their photo and reputation posted alongside the issuer profile.
- All firms must agree to run their business plan through the Cal-X EquityNet Probability of Survival index scoring system. Any firms with less than 50% probability of survival score are not eligible to be posted with us. Potential investors will be given full access to this report.
- All firms must submit a pitch video for grading. Only firms with a pitch score greater than 50% (after mentoring sessions) will be permitted to list on our Cal-X Crowdfund site.
- All firms must submit to a test of “fire and in the belly” and ability to handle critics session with a Cal-X panel or a designated startup incubator or service provider. Only firms scoring higher than 50% will be permitted to be listed on our Cal-X Crowdfund site.
- All firms must agree to hold a minimum of two hours of open unfiltered questions from investors to their CEO and CFO every quarter and to record those sessions and post them on our web site and/or their web site.
- All firms must agree to have their board of directors elected by true open democratic voting by shareholders.
- All firms must agree to self audit for equal pay for equal work for women and minorities.
- All firms must agree to participate when held in their city local Cal-X Chapter meetings (maximum of once per year) where investors can meet the entrepreneurs in person.
- All firms must agree to enter into our independent 3rd party financial writers and coach mentors ranking poll.
TBLI GROUP – Raising awareness of the benefit of sustainable investments
Cal-X Know Your Risks Posts:
(1) Kate Mitchell, former managing director of the National Venture Capital Association and head of the IPO Task Force, recently noted that 40% of her venture capital investments lose their money, 40% basically break even, and only 20% make money.
(2) Failure rates by small business sector – http://smallbiztrends.com/2012/09/failure-rates-by-sector-the-real-numbers.html
As you can see, the odds that a new business survives its early years vary a lot by sector. In order from highest to lowest five year survival rates, the sectors are:
mining (51.3 percent)
manufacturing (48.4 percent)
services (47.6 percent)
wholesaling and agriculture (47.4 percent)
retailing (41.1 percent)
finance, insurance, and real estate (39.6 percent)
transportation, communications and utilities (39.4 percent)
construction (36.4 percent)
(3) Finally, actual data: Series A crunch will kill 1,000 companies, $1B in angel money – http://pandodaily.com/2012/12/19/finally-actual-data-series-a-crunch-will-kill-1000-companies-1b-in-angel-money/
(4) What is the actual survival rate for new firms? From the U.S. Small Business Administration Web Site – http://www.sba.gov/sites/default/files/sbfaq.pdf
Seven out of 10 new employer firms survive at least 2 years, half at least 5 years, a third at least 10 years, and a quarter stay in business 15 years or more. Census data report that 69 percent of new employer establishments born to new firms in 2000 survived at least 2 years, and 51 percent survived 5 or more years. Survival rates were similar across states and major industries. Bureau of Labor Statistics data on establishment age show that 49 percent of establishments survive 5 years or more; 34 percent survive 10 years or more; and 26 percent survive 15 years or more.
Source: U.S. Dept. of Commerce, Census Bureau, Business Dynamics Statis- tics; U.S. Dept. of Labor, Bureau of Labor Statistics, BED.
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1. Revisions Without Notice. Cal-X may at any time revise this Agreement without any prior notice by posting a revised agreement on the Site, which shall become this Agreement. You are bound by any such revisions and should therefore review this Agreement every time you visit this Site.
2. Intention of The Site. This Site is intended to provide you with information about 506C crowdfunding offerings via password protected portals for accredited investors only, tools for analysis of companies, Index fund links, Exchange Traded Fund information links, California Qualification by Permit Offerings and intrastate Direct Public Offerings via Cutting Edge X, to allow Direct Public Offering, California Qualification by Permit and Crowdfunding 506C Issuers the ability to post information about their offerings as permitted by law, and to allow interested parties the ability to link to those offerings to obtain additional information and to potentially invest directly in those offerings.
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You should not rely on any information on this Site, including any statements made within this Site, for financial or investment advice and you are advised to confirm such information with your financial and tax advisor, who should be responsible for taking whatever steps are necessary to check all information and personally assuring that the advice he or she provides is based on accurate and complete information and research.
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• The securities may be sold only to accredited investors, which for natural
persons, are investors who meet certain minimum annual income or net worth
thresholds; > $200K individual income or $300K joint. > $1 million in assets excluding primary residence.
• The securities are being offered in reliance on an exemption from the
registration requirements of the Securities Act and are not required to comply
with specific disclosure requirements that apply to registration under the
• The Commission has not passed upon the merits of or given its approval to the
securities, the terms of the offering, or the accuracy or completeness of any
• The securities are subject to legal restrictions on transfer and resale and
investors should not assume they will be able to resell their securities; and
• Investing in securities involves substantial high risk, and investors should be able to bear the
loss of their investment
RISK WARNING: The Cal-X Stars Business Accelerator, Inc. portfolio of innovations and startup companies are all early stage. The investment risk is very high and investors should be in position to lose all their investment without hurting their financial security. This 506c offering is limited to accredited investors only with > $1 million in assets excluding their primary residence. The offering will be posted on authorized accredited investor only portal sites that verify accreditation qualification such as www.crowdfunder.com, www.healthiosxchange.com, www.equitynet.com and www.angelist.co These portals and other outside service providers assist in verifying with reasonable assurance the accredited status of any potential investor. Merriman Capital http://www.merrimanco.com/ has been hired as an advisory registered broker dealer for this offering. Any potential investor should review all risks published within our private placement memorandum that is available upon written request to email email@example.com or via the above mentioned password protected portals.
Note – New 506c regulations allow general advertising and up to 2000 shareholders while remaining private – http://www.sec.gov/rules/final/2013/33-9415.pdf