How to navigate regulation crowdfunding with Crypto and Blockchain


Read this article to learn from an experienced entrepreneur who has worked for 20 years in her trade on how to take advantage of SEC Regulation Crowdfunding. Regulatory Crowdfunding is an exception in the SEC that allows companies to raise up to $ 1,070,000 through an online platform for the public. He found that to receive the necessary SEC approval for his second crowdfunding campaign, it was not unspoken but it was necessary to abandon the use of crypto and blockchain. From challenging the typical way of raising money through venture capital to navigating the regulatory US land mines. USA To raise funds, this is a story not to be missed.

Dawn Dickson is the founder and CEO of PopCom, a company she has been working with since 2012 which is an automated retail technology company with a hardware and software (SaaS) solution for retail self-service. Essentially, PopCom makes vending machines and kiosks smarter by allowing retailers to collect important analytics at the point of sale and deliver targeted content, similar to how Google Analytics analyzes web traffic.

With your business involving Automated retail technology and self-service machines, the COVID-19 pandemic has resulted in increased demand for your company’s products, making your investor speech much easier. Dickson is the first black woman to raise more than $ 1 million under SEC Regulation Crowdfunding (Reg CF) using a security token offering (STO). Currently in the midst of its second Reg CF, PopCom has raised $ 800,000 in about a month and a half.

And meIf you think you can easily start a tech company, she will tell you to start by getting a tech education first and prepare for months and months of planning before turning to investors, private or public, to raise money. And if you’re asked about your achievement in your first crowdfunding campaign, Dickson will highlight that she had previously become the first woman … not just the first black woman … to raise $ 1 million using a blockchain token offering. And as for a downside, according to Dickson, being a graduate of Ohio State University rather than a coastal university and living in the high state of Ohio were her biggest obstacles to raising capital for her business. The obstacle of not having the right network to raise funds for your company was the motivation to seek equity from the public.

‘The JObama’s Obs Act levels the playing field and access to capital for companies and leverages the community of accredited and unaccredited investors, “explains Dickson. For initial deals where a company is not yet publicly traded, notes: “… a reputable investor needs to earn $ 200,000 as an individual or $ 300,000 if married and have a net worth of $ 1,000,000.” Dickson notes that these investors are ‘… the same people over and over again who They benefit from the success of these early-stage companies where wealth circulates around the same group of accredited investors. ”Dickson explains that he was educated on how to run a crowdfunding campaign, as made possible by President Obama with the Jobs Act. He realized that he had families, friends, and a community of supporters who were not accredited investors, but were educated investors with disposable income and understood the risks and rewards of a investment at an early stage in a company.

Dickson’s time at TechStars built his credibility and helped teach him how to raise private equity. She notes that, to date, PopCom has raised more than $ 3 million, of which the first million has been raised from venture capital and accredited angel investors in 2017-2018. However, it was in 2019 when he made the leap to crowdfund, and it was not an easy decision. When he did his first crowdfunding campaign, Dickson was off the “track” and spent his last $ 10,000 to pay for the platform and audited the financial data to run the 2019 campaign. Dickson points out: ‘No institutional investor supported crowdfunding because it takes control of their hands. They didn’t teach me about crowdfunding and, no, they didn’t support it. An investor really told me, if you do this, I will never follow [with an investment]’.

That campaign, Dickson claims, was the, ‘… The first time people had actually seen a black person en masse [who] does something like this …[as I was the] first black female founder, first female founder to raise millions of dollars in a crowdfunding campaign, “Dickson proudly proclaims. His first crowdfunding campaign was oversubscribed, at $ 1.3 million, and is now at $ 800,000, closing the $ 1,070,000 limit for this campaign.

Dickson noted that preparing for her to be able to answer any questions during fundraising and not be defensive is key. ‘In the CV $ 1,000,000 in the world is not a lot of money, but with crowdfunding, are people like you’ve already spent the 2019 money? “Says Dickson. She also emphasizes that a person should really start by going to school and learning about technology before starting a technology company. She cautions that ‘…[to build a] technology company, you must have technology education, whether you attend school or attend Techstars or Y Combinator or [another] accelerator to get the proper mentoring and education to grow a company, build a team, build credibility, grow your network. ”

This time, his crowdfunding campaign provides equity in the company in the form of share certificates and is not a token sale. While the last round was a token offering, Dickson comments that the SEC does not fully support token offerings. “They act as if they agree with crypto and blockchain, but their actions show otherwise,” says Dickson. In the sense that the benefit would be to sell the liquidity tokenized shares on a secondary trading platform, until the SEC decides to approve this, there is no real benefit of having a “crypto” security token offering anyway. A token is a digital version of a share instead of a paper share; The main benefit of using a token for financing is that you can sell the token for liquidity.

Furthermore, these investors could possibly have the option to convert to a symbolic share if the SEC clears the way for a secondary market. However, for this fundraising round, he removed any signs of crypto usage in his offering. ‘If we include crypto or tokens in our offer document, we don’t feel confident that the SEC would approve our offer. It is an unspoken rule. Our new page doesn’t mention blockchain because [the SEC] I don’t like it, “explains Dickson.

“ I testified before Congress to help lawmakers understand that the negative stigma attached to blockchain is due to bad actors, and they are restricting companies that want to use this technology for good … Should people leave of using the fiat dollar because some people are scamming with that? Dickson exclaims. When asked if he thought the SEC has a bias against tokens, and if so, where he thinks this resistance to tokenized values ​​is coming from, Dickson responds quickly, ‘2017. When many people became Bitcoin millionaires, and the government and banks couldn’t control those markets. That’s just my opinion “.

Dickson encourages people to consider the fact that with COVID-19, the SEC provided relief and made crowdfunding even easier, making it a good time to learn crowdfunding. According to Dickson, crowdfunding can be as low as $ 50,000 to $ 100,000 to keep the viable product to a minimum.

With her second crowdfunding campaign almost finished, Dawn Dickson will be someone to look to. His leadership is already illuminating some of the real-world challenges of navigating as a crypto or blockchain company. Most importantly, it has opened the door to a new class of thirsty investors using blockchain tokens and blockchain technology for crowdfunding.