SoMoLend

Plum Street Productions premiered their short film, “The Good Fight”, on March 28 at the Twentieth Century Theater. A few members of the SoMoLend team: Candace Klein, Michael Hawkins, and Erin Klotz, had the pleasure of attending this event and interacting with the local Cincinnati filmmaking community. The night was a delightful experience, including live music, and the viewing of the short film. We highly recommend those with an interest in short films to check out “The Good Fight”.  

The Western-themed evening began with a local Cincinnati Band, The Young Heirlooms, playing an hour for the guests to enjoy while they mingled and snacked on food. It was a great way to begin the evening with entertainment that allowed everyone to engage in conversation and for the team to meet several individuals involved in the local filmmaker community. It was interesting to hear each individual’s story and the various projects they are working on locally. They are highly motivated to bring positive recognition to Cincinnati for independent film production.

Prior to the screening, Michael made a short presentation about what SoMoLend can offer small businesses, specifically those individuals that are part of the film industry. The film industry is considered a high-risk investment, making it more of a challenge for production companies, like Plum Street Productions, to receive traditional forms of funding. Through the SoMoLend platform, filmmakers and production companies can access the capital needed to fund their projects. In meeting all of the various attendees that night it became clear the film industry could benefit from friends and family funding. 

The final part of the evening came with the premiere of the short film, “The Good Fight” followed by a short Q&A session with the producers and cast. The film itself much like the evening was excellent and received a standing. As the evening came to a close the team left with high spirits from the positive vibe surrounding the premiere.   

Plum Street Productions (PSP) is a Cincinnati-based, full service creative group that specializes in video production, filmmaking and visual storytelling. From project conception to storyboarding, video production and post-production work, PSP helps companies and organizations create custom, branded videos for a variety of audiences. They have done a great with many of our customer fundraising videos. Check them out if you have a video production need.

To learn more visit: www.plumstproductions.com

Photo: Plum Street Productions Cast and CrewPhoto: Michael HawkinsPhoto: Candace Klein and Erin Klotz

I just returned from Washington, D.C. this week, after an action-packed day with the leaders of the crowdfunding space. My peers at Crowdfund Intermediary Regulatory Advocates (CFIRA) and I went to speak with the White House, Congressional Staff, SEC and media about the need for progress. We went to the hill this time with a very specific goal in mind – move the regulations for crowdfunding to public comment.

The JOBS Act was passed last April, and a deadline was set for the SEC to create regulations for the crowdfunding space.  This deadline was set for December 31, 2012, and as you can see it has come and gone.

Now, it’s important to know that I am not writing today to complain about the process. In fact, the SEC staff, the Financial Industry Regulatory Authority (FINRA) staff and even the four commissioners have been more than gracious with the industry and myself. We’ve had multiple meetings with each group, and I truly believe that we are being heard. I also believe that the SEC staff has worked extremely hard, with no additional budget, to create the rules for an entirely new industry.

Yet, we still find ourselves at a standstill. Chairman Elisse B. Walter, now has the ability to call the draft rules forward for public comment, but has not yet done this.  It is true that she has a lot on her plate, and it is also true that Mary Jo White has now been appointed to replace the seat.  However, White has not yet been confirmed, and Walter has the full authority to act on her agenda until that happens.

Did it work?  I’m not sure yet but this is just the beginning. We intend to begin a public effort to get more entrepreneurs active in this process, which will kick off in partnership with Startup America at South By Southwest in March.

Stay tuned my friends and colleagues, in the meantime it won’t hurt for you to reach out directly to Chairman Elisse B. Walter and offer your thoughts as well. Click here (Public Comments on SEC Regulatory Initiatives) to reach out.

Thanks, Candace.

See our crowdfunding media coverage below:

• Bloomberg TV: What is the Future for Crowdfunding (Video)
• The National Press Club: State of Equity Based Crowdfunding (Video)
• Forbes: Crowdfunding Is About Creating Jobs For The Right People (Article)
• Investment News: Advocates SEC to propose Crowdfunding Rules (Article)
• Forbes: Will the S.E.C. Kill Crowdfunding? (Article)

That was the question on Washington Post’s mind when they recently interviewed SoMoLend via its founder and CEO, Candace Klein, and SoMoLend Board Member, Cheryl Stamm.   To find out what some of the top innovators in the crowdfunding industry think, read HERE.

How does the crowd feel about crowdfunding?  According to a recent survey of 740 small-business owners with between $1 million and $20 million in annual revenue by the Wall Street Journal and Vistage International, Inc., only 3% said they felt they would benefit from crowdfunding.  Furthermore, only 21% said they were even aware of the JOBS Act.

For those of you reading this blog who fall in this category, the JOBS Act (Jumpstart Our Business Startups Act) was passed by President Obama and Congress in April 2012 and is in support of entrepreneurship and small business growth.  The JOBS Act is designed to encourage small business and startup funding by easing federal regulations and allowing individuals to become investors. For more information on the JOBS Act, check out the Forbes article, The JOBS Act: What Startups and Small Businesses Need to Know.

SoMoLend feels that the low survey numbers above reflect a lack of education on the part of many potential borrowers.  This is one of the main reasons we are such big advocates of doing everything in our power to make sure the crowd, both lender and borrower, are wholly and regularly informed. This also includes educating the public on any risks associated, and sharing information on how to protect their investments in order to fully take advantage of the benefits crowdfunding is able to provide.

Although SoMoLend is often associated strictly with crowdfunding, it’s important to note that we also benefit small business owners looking to acquire funding from accredited investors and banks nationwide.  We pride ourselves on being more than just a crowdfunding platform and act as an aggregate which includes a wide range of funding options for today’s savvy entrepreneur.

SoMoLend CEO and founder, Candace Klein recently participated in one such event focused on the importance of education, in this case particularly targeting female entrepreneurs and investors.  The Phoenix-based event was hosted by 85 Broads and was called Women Investing in Women.  There were over 300 people in attendance comprised of 50% female entrepreneurs and 50% female angel investors.  Event organizers Anu Bhardwaj and Mary Juetten created the conference with the sole purpose of educating females on how to take advantage of crowdfunding, as well as other forms of access to capital and wealth-building opportunities.  As part of SoMoLend’s commitment to educate the public,  Candace gave a presentation on how to execute a pitch and also partook in a mock pitch with judges (all angel investors).  Their “grilling” included typically asked questions on focus of size of market, competitive advantage and business model.”

Candace and the SoMoLend team are greatly motivated to see groups like these taking the proactive approach to crowdfunding education. For those reading this blog who would like to learn more about investing in women business owners specifically, below is a great breakdown which was included on SocialWayne.com.  Blogger, Wayne Sutton helps individuals, startups and businesses succeed in understanding how to communicate on the social web via web development, user experience, brand strategy and marketing (Mobile and Social).

SoMoLend is excited to announce we are partnering with Hamilton CORE (Consortium for Ongoing Reinvestment Efforts) Fund.  This partnership will streamline and expedite lending process for Hamilton small businesses and help the region’s small businesses gain access to the funding they need to continue to grow.

The CORE is a gap-financing organization focused on real estate development within Hamilton’s urban core. Investors in the CORE Fund include the Hamilton Community Foundation, First Financial Bank, Fifth Third Bank, and the City of Hamilton. Through
this partnership, small businesses, particularly those focused on urban commercial and residential real estate development, can apply to borrow much-needed capital for projects in Hamilton’s city center.

The CORE will officially launch today, December 13, 2012, at 2:00 pm at Miami University Hamilton Downtown, 221 High Street in downtown Hamilton, OH.  We’re thrilled to continue to impact business growth in the community and beyond!

SoMoLend’s focus is helping entrepreneurs acquire the capital they need to launch or expand their own businesses.  That being said, we love spotlighting CEOs and business owners we look up to within and outside our industry.  Today’s blog is dedicated to an interview with Springboard Enterprise’s CEO and Founder, Amy Millman.  Stay posted for other spotlights in the near future.

How difficult is it for female entrepreneurs to secure capital in today’s economy?   There is a lot of money (dry power!) out there waiting to be put to work (invested in promising companies).  That said, unless you have a successful track record, are married to an investor, worked with investors, have a network that includes close working/social relationships with your colleagues from Stanford, Harvard, MIT, Chicago, and about 10 other universities, know someone who knows someone in those networks and is willing to go to bat for you or you just happen to be in the right place at the right time (luck meets opportunity),  it’s difficult for anyone to secure the capital you need to grow fast.  Until groups like Springboard came into existence there were few access points for most talented women entrepreneurs.   It would also help if there were more women investors.   Still, we’ve come a long way (baby!) since 2000 when we launched Springboard.

What strengths and weaknesses to women business owners bring to the table?  We’ve found that women have all the qualities necessary for running successful fast growth companies but often undersell themselves.   The same qualities that investors want to see in CEOs focused, strategic, big picture view but detail oriented, collaborator, problem solver, etc. –  are not the qualities that attract investors to a founder when they first meet.   It’s like a marriage, you look for someone who is like you when you are dating but want  to marry someone who complements you.

Do you feel that factors like caregiving and family impede female entrepreneurs more than men? What would be some solutions you believe would help or do you feel it should not factor in?  Most of the women entrepreneurs we work with are expert at multitasking and that includes raising children.   Investors have not shown themselves to be particularly comfortable with pregnant CEOS but perhaps once women CEOs of child bearing age are more visible and investors see big returns from companies led by women who have given birth while launching and growing their companies, investing in women won’t make them so uncomfortable.   Changing attitudes and behavior takes time but nothing makes change happen faster than a big lucrative exit.
Why would you suggest a female entrepreneur utilize an Accelerator?   Anyone who thinks they can build a company by themselves without the right team and a big tent network to open doors and help with challenges is fooling themselves.  Can’t be done.  Accelerators are an important player in network building.  However, they are not a one size fits all, so it’s important to pick the right one.

What would you say to a woman who wants to start her own business – what would be your most important advice?  Owning your own business is one of the most satisfying and terrifying experiences anyone can undertake.  If you are fearful of failing, perhaps you aren’t ready or willing to take the plunge.  But, if you have a passion and the drive to find the resources to help make your vision a reality, you really need to go for it.   You’ll find that you know more than you think you know and that people will be happy to help you succeed.  The key is to be someone who reaches out, asks for advice and cultivates a large and engaged network.

What has been your biggest challenge or failure in founding your business and how did you overcome it?  I started this non-profit organization with very little experience managing finances and I would say that that has been my biggest challenge.   Very quickly I realized that ‘the numbers tell the story’  of what is really going on with the business/organization and you can overcome that challenge if you gave sufficient time and resources to managing finances on a day to day basis.  Of course, it’s smart to hire someone early on who does this well.  I always say that you should have a lawyer and an accountant watching your back at all times.

Anything else you would like to add?   Launching, growing and running a business is not rocket science (unless that what your company is all about).  People have been doing this for thousands of years and while it isn’t an exact science there are rules of thumb you must adhere to.  Know the rules and start clean, recruit a team you can trust that buys into your vision, build an expert network, hire a good lawyer and an accountant and don’t wing it –  build and iterate but follow the plan.

Check out Springboard’s column on Inc.com HERE.

About Amy Millman: Amy Millman is a passionate advocate for women entrepreneurs building Big Businesses Starting Small. In 2000, she co-founded Springboard Enterprises, a non-profit venture catalyst which sources, coaches, showcases and supports women-led companies seeking equity capital for product development and expansion. Springboard has assisted hundreds of women entrepreneurs in raising billions in investments and connecting with thousands of expert resources. The successes of Springboard entrepreneurs include 10 IPOs, legions of high value M&As and a community of accomplished serial entrepreneurs. During her career in Washington, DC, she served as a representative for several industry groups and was appointed as Executive Director of the National Women’s Business Council during the Clinton Administration. She served on the boards of many organizations including her current service with JumpStart Inc. and Enterprising Women Magazine. She is a graduate of Carnegie Mellon University and holds a Masters degree from The George Washington University.

Yahoo! News recently posted a great article called, “The JOBS Act: Could It Create a Two-Tiered System?”  Authors, Daniel Gorfine and Ben Miller, address a very important issue which is the divide created between accredited investors and crowdfunders resulting from Title 2 of the JOBS Act.  Title 2 includes the removal of the general solicitation ban for 506(c) offerings.  What does this change mean for these two different types of investors?

This means that any business setting out to raise money from accredited investors can now use advertising to do so; however, they are only able to accept money from accredited investors.  One example of this would be a business owner taking out a full-page ad in the Wall Street Journal advertising the benefits for accredited investors to fund their business.

Crowdfunding, on the other hand, is a completely different offering and does not allow for advertising.

This ultimately creates a divide – forcing entrepreneurs to choose one avenue or the other.  We agree with this article in that “if the SEC is not careful, the net effect of the JOBS Act may be to further empower more affluent investors, while leaving the crowd behind.”

SoMoLend has been lobbying for a solution to this issue with strong advocacy for integration. Integration essentially allows an entrepreneur to do a crowdfunding exemption offering via a portal while simultaneously raising money through advertising to accredited investors. While many are pushing for this amendment, it is still under consideration with the SEC now.

In our own meetings with the SEC, SoMoLend has suggested that they allow for integration as long as the offerings have identical terms.  For instance, a borrower could accept $1 million through a crowdfunding platform and $5 million through a 506(c) as long as they are willing to offer the same investment terms; we feel this would eliminate the problem altogether.

For us, it doesn’t matter so much how the borrower or investor finds out about the opportunity as much as it does how educated they are on all of the factors involved with the transaction.  Whether the information is disseminated through solicitation or word of mouth referrals, the most important factor is the clarity of the message and opportunity.  That’s why we strive to keep it simple when it comes to connecting the right borrower to the right lender and are committed to teaching and assisting both parties along the way. For more information on this topic or questions for SoMoLend, please email info@somolend.com.

Did you support your local small business this past weekend for Small Business Saturday?  Watch winner of SoMoLend’s first SoMoLaunch Business Competition, Candice Peters, dish on small businesses, her company, Hyde Park Body Boutique and what the prize money did to help her company grow HERE.