Louisville’s nascent investment crowd-funding group took a major step Wednesday toward creating the first – or among the first – formal, functioning efforts in the United States.
Members of the 3-month-old group are striving to position the region for the new digital dealmaking revolution expected with the Jumpstart Our Business Startups Act.
Think Kickstarter, but with investors rather than contributors, investors who have a piece of the business.
Proposed changes to Securities and Exchange Commission regulations are expected to allow more businesses to use the Internet to reach a new investor class, a group far larger than allowed today under SEC regulations dating back to the 1930s.
However, the final reforms are not expected until late this year, or the first quarter of 2014.
Today, 22 of 28 total formal committee members voted unanimously on a final name, and CommonWealth Crowfunding Committee, or C3, was born.
The name – proposed by Erik Snyder, marketing strategist at Blackstone Media – stresses collaborative, crowdfunding success through “common wealth, as well as plays on Kentucky’s status as a commonwealth, not technically a state.
But it eschews a Louisville identity, because the group now has members from Southern Indiana, Lexington and Northern Kentucky.
The name survived multiple virtual brainstorming sessions. “We really batted around a lot of names,” said Joe Dover, director of sales and marketing at OPM Entrepreneurial Services, the Louisville -based investment and consulting firm, and chairman of the C3 communications committee.
In addition, C3 Infrastructure Committee members including Bobby Ferreri, EnterpriseCorp executive director, revealed the early outline of platform mechanics.
The goal is to create an organization and an Internet portal “where people interested in (Internet-based) crowdfunding can plug in and participate,” Ferreri said.
He added the group was adopting Louisville’s growing drift toward lean startup methodolgy: “We’re not building something massive. It’s the best way to match crowdfunding activity to service providers.”
Toward that end, C3 is focusing first on refining the idea of what a successful crowdfunding investment campaign looks like, the best entrepreneurial candidates on the way to being able to deliver a package of service providers at the best possible rates for the startups.
“We’re trying to create the brand … that says, ‘Louisville (and the region) is the easiest place for me to raise crowdfunding dollars.”
Ferreri and his committee grouped topics under sell side (those seeking to raise capital or sell debt) and buy side (those investing or lending) and created specific steps toward bringing Louisville together.
Points under sell side include:
• Creating a roadmap– a step-by-step approach that guides entrepreneurs through the elements of participating in a crowdfunding campaign.
• A support network of service providers and advisors standing by to assist companies plan and execute campaigns.
• An effective message distribution technique to allow the best campaigns to reach audiences in the region and far beyond.
Points on the buy side include:
• Developing a portal, an aggregator that pulls campaigns of interest to the local investor network.
• Driving social incentive by highlighting or rewarding frequest investor participation.
• Enabling a portfolio approach to help investors diversify.
• Establishing a referral network, promoting the platform through affiliation with banks, financial advisors and accounting firms as an accessible way to support local companies.
Much of the discussion during Wedensday morning’s meeting at the Muhammad Ali Center focused on how to best identify existing companies as test cases for C3’s efforts.
Consultant Mary Thorsby and others suggested the best approach for a test might be finding a high-profile, local company seeking capital, either as equity or debt.
The effort to create C3 began back in January when Kent Oyler, a longtime entrepreneur and investor, organized the inaugural Louisville Equity Crowdfunding Committee (working title) at his OPM Entrepreneurial Services offices. The first meeting last January 10 drew 15 people.
Since then, membership has doubled and includes investors, entrepreneurs, consultants and economic development officials from the region including:
(All members are based in Louisville unless otherwise noted.)
Susan Bergmeister, entrepreneur-in-residence, University of Louisville
Deborah Boyer, independent consultant and entrepreneur
Charles Buddeke, investor
Vik Chadha, executive vice president, Venture Development, Nucleus; Co-Founder at Backupify, Inc.; Co-Founder at Scalable Ventures, LLC
Tom Cottingham, CEO, Insider Louisville.
Ceci Conway, managing director of IdeaFestival
Bill Dawson, manager, University Commercialization- Enterprise Corp at Greater Louisville Inc.
Joe Dover, director of sales and marketing, OPM
Bobby Ferreri, executive director, Enterprise Corp at Greater Louisville Inc.
Charles Moyer, retired dean of the College of Business and Public Administration at U of L.
Kent Oyler, founder and managing partner of OPM
Brian Raney, founder, Awesome Inc., Lexington
Elizabeth Rounsavall, director, research & analytics, Chrysalis Ventures
Nick Such, director, Awesome Inc.
Tony Schy, CEO of Velocity SI, a new Southern Indiana startup incubator and co-founder of Jeffersonville-based health care auditing firm Chapman Kelly Inc.
Ted Smith, director, Department of Economic Growth and Innovation at Louisville Metro Government
Mary Thorsby, CEO at iList Media, and corporate communications consultant at Thorsby + Associates
Phoebe Wood, principal, CompaniesWood, an angel investor and former Brown-Forman CFO.