Global Edge International Consulting Associates, Inc.: Douglas E Castle

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Sunday, November 1, 2015

Equity Crowdfunding Has Landed!

Equity Crowdfunding Has Landed

Now Anyone Can Participate In StartUp IPOs.

Investment Bankers? Prepare To Be Disrupted And Displaced.

Promising New Companies Have A New, Easier, Cheaper Source Of Capital

By Douglas Castle for GEI Consulting and The Global Futurist Blog

NOTE: THE INFORMATION CONTAINED IN THIS ARTICLE SHOULD NOT BE CONSTRUED BY THE READER AS BEING LEGAL, FINANCIAL, TAX, ACCOUNTING, ECONOMIC OR INVESTMENT ADVICE. NO OFFERING OF SECURITIES OR OTHER INVESTMENT INTERESTS OF ANY TYPE IN ANY ENTITY IS MADE HEREBY, NOR IS A SOLICITATION FOR THE PURCHASE OF SECURITIES OR OTHER INVESTMENT INTERESTS OF ANY TYPE IN ANY ENTITY MADE HEREBY. THIS ARTICLE IS INTENDED FOR GENERAL INFORMATIONAL PURPOSES ONLY AND REPRESENTS THE VIEW OF THE AUTHOR ONLY.

THIS ARTICLE IS COPYRIGHT 2015 BY DOUGLAS E. CASTLE, WITH ALL RIGHTS RESERVED. ANY REPRODUCTION, TRANSMITTAL OR DISTRIBUTION OF THIS ARTICLE, EITHER IN WHOLE OR PART, IS UNAUTHORIZED AND MAY BE UNLAWFUL, UNLESS FULL ATTRIBUTION IS GIVEN TO THE AUTHOR AND ALL LINKS IN THE ARTICLE REMAIN INCLUDED AND “LIVE.”

The Securities & Exchange Commission (SEC) has now approved and promulgated (by publication) the Final Rules for Title III Equity Crowdfunding under the JOBS Act legislation. In a few months, any investor, regardless of income and net worth, will be able to participate in a startup company by purchasing shares or debt (bonds, etc.) and earning a return on investment in the form of capital gains, dividends or interest.

This is truly revolutionary in the world of crowdfunding, which has been dominated since its inception by rewards-based and donation-based funding approaches. These offerors, featuring their pavilions on such sites as Kickstarter, Indiegogo and GoFundMe, were not permitted to offer securities to participants. Now, that has all changed.

If a startup or entrepreneurial enterprise wants to raise money by selling its shares, bonds or notes to the public, it may now do so on one of any number of duly-licensed internet-based platforms, often referred to as “portals”. Equity crowdfunding will disrupt the traditional capital markets, and will eliminate much of the expensive and extensive compliance requirements associated with typical private placements (offerings to a limited number of investors pursuant to the terms of a private place confidential offering memorandum), and initial public offerings (sold by prospectus through investment banking and securities brokerage houses).

There are, of course, certain rules and restrictions on the amounts of such offerings, and on certain other aspects of raising money through securities offerings orchestrated through internet-based crowdfunding, which can be done by licensed and registered securities broker-dealers and a new class of less-restrictively regulated entities called “funding portals”. Some of these restrictions are highlighted briefly in an article in Fortune magazine:

http://fortune.com/2015/10/30/its-official-startups-can-soon-raise-money-from-your-grandma/

Another article which sheds some further light on this dramatic change in the possibilities for startups to raise operating capital through securities crowdfunding can be found in an article in Forbes magazine:

http://www.forbes.com/sites/chancebarnett/2015/10/30/sec-approves-title-iii-of-jobs-act-equity-crowdfunding-with-non-accredited/

The most comprehensive outline (merely a hint) of the newly adopted rules and restrictions is set forth in a press release put out by the SEC itself:

http://www.sec.gov/News/PressRelease/Detail/PressRelease/1370540017677

A quick synopsis of some of the potential changes anticipated to trend through equity crowdfunding via investment bankers and portals follows:

=> There will likely be a decline in the percentage of entrepreneurial companies seeking funding in excess of $25,000.00 - $50,000.00 through the traditional rewards-based crowdfunding platforms, and a dramatic increase in the number of startups listing themselves on portals, especially those nascent enterprises and projects seeking capital of between $100,000.00 and $1,000,000.00;

=> There will be a decline in the percentage of total startups seeking money from venture capitalists, angel investor syndicates and private equity sources. These last three categories of capital sources will still be seeing their share of larger (i.e., in excess of $5,000,000.00) fundraising deal prospects, especially where disruptive technological innovations are valuable proprietary intellectual property are involved; and

=> Some entrepreneurial offerors will be “working,” “gaming” and otherwise testing ceilings on crowdfunding offering amount limitations by experimenting with offering units featuring layers of warrants, aggressive conversion features and other ingenious ways of working within the written legal framework of the regulations, while possibly pushing the intended regulatory envelopes. Some of these crowdfunding experimenters will be seen as pioneers and others as outlaws (naturally);

=> There will be an economic stimulus to the US economy through a variety of channels including an increase in private sector permanent jobs creation in the small business sector;

=> A goodly portion of the fees generated by traditional investment banking firms will be shifting over to the owners of licensed and registered portals. Investment banking will be significantly disrupted, especially in the IPO market, while portals will be inundated with both supply-side and demand-side business and the income which is ordinarily associated with underwriting.

As always, thank you for reading me,

Douglas Castle for Global Edge International Consulting Associates, Inc. and The Global Edge International Blog

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Tuesday, July 28, 2015

Measuring Your Social Media Progress

MEASURING YOUR SOCIAL MEDIA PROGRESS

There are some interesting and useful metrics which you will want to use to measure the success (or incremental progress at intervals) of each of the individual social media items in your social media mix. You'll find these simple guidelines indispensable – especially if you monitor them at consistent intervals with genuine vigilance.

And while these are not actually a means of measuring your actual return on dollars or time invested in social media, they are wonderfully basic and easily calculable rules of thumb to inform you as to how each of your social media tools is performing, and what the whether or not the associated performance trend is improving.

An example of this type of measurement is the number of “likes” that you have on your Facebook company page; while nobody can consclusively assign a dollar value to each “like”, it is commonly understood that the more “likes” that you have, the more probable it is that you are engaging your audience, and that that audience may contain some future customers or clients.

While the metrics used in this article are not directly dollar-equated, they will provide you with an indication of how well your campaign to engage an audience (and some possible prospective clients or customers) is going. These are “quick and dirty” tests and are not totally scientific – there's been no correlative study. This material is all anecdotal, and your Social Media Guru might even find some of this material objectionable. You've been warned.

The social media selected for this article include Twitter, Facebook, LinkedIn, Google Plus (G+) and business blogging. While this last item is far too often excluded from the general categorization of social media, it is actually critical in a demographic environment where “content is king.”

Other social media such as Pinterest, Instagram, Digg, Reddit, Foursquare, and a host of others are not covered because we're still experimenting with their metrics. We've also excluded such video media as YouTube, Vimeo, and others because of the already-extensive measurement information coverage available on the Internet.

=> Twitter:

The ratio of Followers to Following should be increasing. If this ratio is less than 1, you'll look like a beginner. The higher this ratio, the more of an influencer you will appear to be – and in dealing with social media, appearances are important in terms of harnessing the undisputed driving power of the herd mentality.

The ratio of your Tweets to the number of Followers should be decreasing, which indicates a higher and increasing level of engagement and influence (theoretically – these ratios are all theoretical), unless you are extraordinarily chatty or have a significant flow of RSS material from third-party sources being pumped into your twitterstream via Twitterfeed or some similar application, in which case this ratio would be falsely negatively affected.

=> Facebook:

The number of likes on your company or brand page should be increasing weekly. If your total page likes do not exceed 1,000, you'll look like a beginner. More page likes indicate the acceptance and recognition of your brand, and/or of the content that you place on your page. Try your best to provide some interesting or insightful content on the site daily. The more frequently that you post, the more likely it is that your page will acquire additional likes.

Also, as with Twitter, a greater amount of likes is more apt to generate new additional likes due to the herd mentality of many viewers. If a substantial number of the likes are originated through your company's blog, website or newsletter, the more potent those three sources are in terms of audience engagement.

The ratio of likes originated from non-Facebook sources to Facebook-originated sources should be increasing over time, indicating that your other branding campaigns are working well.

Getting positive page reviews and status update likes are generally indicative of the potency of your page and its flow of content, more than of your branding, per se.

=> LinkedIn:

Followers on your LinkedIn company page are similar to “likes” on your Facebook company or brand page, except that they are generally more difficult to get. As with Facebook, the ratio of followers originated from non-LinkedIn source to LinkedIn sources should be increasing over time, indicating that your other branding campaigns are working well.

Since LinkedIn is more of a business-to-business and professional-to-business platform than Facebook, which is far more consumer-involved and consumer-engaging, acquiring additional followers generally speaks more to how your company is being perceived as a professional or business thought leader or influencer than as an endorsement of or engagement with your brand.

In very general terms, if you have in excess of several hundred followers on your LinkedIn company page, you're looking good. It is much more of a challenge to obtain LinkedIn followers than it is to get Facebook page likes, positive reviews or status update likes. By the way, “status updates” are the same as posts.

=> Google Plus (G+):

Google Plus is arguably one of the most potent SEO media, and it is powerful way to refer viewers or followers to your website, blog, and other social media. Google Plus is akin to some combination of Facebook, Twitter and a blog posting platform, all rolled up into one. Your company can use Google Plus as a means of achieving brand acceptance and name recognition, as well as in garnering influencer and thought leader status from the business and professional communities. It is an excellent social media tool precisely because it lends itself to so much multi-purposing. Don't underestimate it and don't underutilize G+.

The variables to be looked at are “acquaintances”, “Followers” and “views”. Acquaintances will also be deemed to include, “friends”, “family” and any other category of person whom you can add to your list by your own action. At present, the maximum number of these unilaterally gathered parties permitted by Google totals 5,000.[If you don't believe me, just try to add some new acquaintances afterr you've hit the permitted maximum and Google will send you a cold reminder that you cannot add any additional persons to your circles 'at this time']. There are no limits to the number of followers which you may accumulate and the number of views (of your G+ profile page).

The first raio to be looked at is the number of Followers to the number of acquaintances, which should be rising. Once this ratio exceeds 1.0, and provided that the number of your followers exceeds 5,000, you are on your way. Once the number of your followers exceeds 10,000, you will become noticed, and the (now infamous) gravity pull of the herd mentality will bring you even more followers and even more views with less effort. If your posts to G+ are laden with links to your other social media, it will be feeding those other media with new likes, views, members, followers and so forth, as well. You'll find that your G+ results appear very early on in your Google search results, and that your other social media postings will be gaining prominence if you've been building them through the use of hyperlinks in you G+ posts.

The second ratio to be evaluated periodically is the number of views to the number of your Followers. While it is difficult to give you a benchmark objective on how this ratio should be rising and what it should ideally be, if you've exceeded one million profile views and you've gotten 10,000 Followers your G+ campaign is getting noticed. It should be noted that one million profile views if regarded (anecdotally) as a good benchmark to indicate that your post to G+ are carrying a good deal of influence. Having said all of this, a ratio of 100 views per Follower (on average) is an excellent target to meet and to exceed.

=> Business Blog:

Your blog's success (in terms of readership) is a major measure of your influencer and thought leadership status. It is also obviously a measure of the quality and magnetism of your content. You should be looking at posting one new article per week (or more if posible) to keep your blog “fresh” and have it frequently viewed by the spiders, robots and other cyberspace creatures that constantly search for an review new content.

The variables to be looked at are simply the number of posts and the number of views. As your number of posts (cumulatively) is growing, average number of views per post should be growing (for the blog as a whole), and the number of views per post (individually) should generally be tending upward as well, although you may expect some fluctation depending upon the strength of the individual post – and the strength and virality of posts will vary depending upon a wide variety of factors, from the number of illustrations (images) embedded into your posts, to the title of any given post. An exciting title can do wonders for the traction of a single post.

In Summary:

Monitoring each of the social media tools in your social media mix will tell you if you are heading in the right direction for improved status in terms of branding, name recognition, being an influencer and being a thought leader. I would strongly advise that you run a quick set of diagnostic ratio and growth tests on your social media weekly to be able to intelligently assess whether or not you are making progress.

Tags, Labels, Keywords, Categories And Search Terms For This Article:

social media, metrics, media mix, branding, influence, Twitter, Facebook, Google Plus, LinkedIn, blogging, measuring, Douglas E Castle, GEI Consulting, business, marketing, success, analytics, views, Followers

Thank you, as always, for reading me.

Douglas E Castle

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Tuesday, July 14, 2015

The StartUp Entrepreneur's Greatest Challenge

The Startup Entrepreneur's Greatest Challenge

The startup entrepreneur's greatest challenge is to weigh possible sunk costs (throwing good money or effort after bad), against the power of persistence.

Time and effort are the entrepreneur's greatest inherent assets. These are complemented by capital, a good supporting team (and good advice) and a large network of active relationships. The entrepreneur in the startup phase of his or her business should expect to face numerous, often discouraging obstacles to adoption and success. And arriving at an appreciable success can take time. During this time period the entrepreneur may well be faced with doubts about the viability of his or her basic idea.

The challenge, while the startup entrepreneur is watching and waiting, is to determine if the project has enough quality and substance to continue expending time, effort and capital into it, or whether the viability just isn't there, and to write the expenditure to that point off as a sunk cost, and shift his or her focus to another project – to “scrub the mission” and proceed to another, unrelated project. Choosing whether or not to invest further into the project and allow time to be the determining factor of success is a critical decision.

There is so much to be said (and there are so many stories) of entrepreneurs and inventors who believed so fervently in the viability, importance and marketability of what they were doing that they just held their ground and kept on plugging away until the tides started to turn in favor of success. Then there are the untold stories of the hordes of aspiring inventors and entrepreneurs who mistook a lack of early-stage success for a lack of viability that they simply quit. In some cases, the decision to quit was warranted – in other cases (and we'll never be able to get any statistics on these), had the entrepreneur or inventor continued along the course, it might have caught on – or with some modification, it might have been a certain winner.

Things are not always that black and white. If the entrepreneur or inventor truly believes in the viability of the idea, and, upon discussion with some or his or her advisors, mentors and relationship contacts, gets some positive feedback about the idea, perhaps the best solution is to reframe or to re-package some aspect of the idea at issue instead of simply throwing away erroneously. Perhaps the idea, project, or invention is just not being represented in its most appealing fashion. Sometimes “tweaking” the presentation or packaging of the idea will accelerate its course to adoption and success.

As a startup entrepreneur, I would plead with you not to jettison an idea about which you are truly passionate. While I don't believe in wasting resources on an idea, project or invention which is simply not good, I believe that we believe in our ideas for a reason. Whether that reason is just a function of our own strong opinion or whether it is a manifestation of the collective conscientiousness, please give your idea, your dream a chance to flourish... and instead of abandoning something which could truly be ingenious, invest some time and solicit feedback regarding a potential reframing, repositioning or repackaging of your idea. It's far better to “tweak” some aspect of a brilliant idea (or its presentation) than to throw away an asset which may prove to be something of great utility to Humanity... or at least a market segment of it.

Startup entrepreneurs: You've put so much thought and passion into your idea, project or invention. Evaluate your situation very carefully before you write off your dream as a sunk cost. Your tenacity and audacity (these plus some creativity and a modifications) might well mean the difference between a slow start to a certain success or another contribution to the ever-increasing junkpile of great starts which were stillborn or aborted because the entrepreneur simply gave up and quit too soon.

Labels, Keywords, Tags, Categories And Search Terms For This Article:

startup, entrepreneur, entrepreneurship business, persistence, sunk costs, patience, GEI Consulting, Douglas E Castle, capital, team, project, invention, innovation...

Thank you as always for reading me.

Douglas Castle for Global Edge International Consulting Associates, Inc. and The Global Edge International Blog

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Sunday, November 1, 2015

Equity Crowdfunding Has Landed!

Tuesday, July 28, 2015

Measuring Your Social Media Progress

Tuesday, July 14, 2015

The StartUp Entrepreneur's Greatest Challenge

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