How To Navigate Regulation Crowdfunding With Crypto And Blockchain

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Forbes | Jason Brett | May 10, 2020

Ms Dickinson - How To Navigate Regulation Crowdfunding With Crypto And BlockchainDawn Dickson is the founder and CEO of PopCom, a company she has been working on since 2012 that is an automated retail technology company with a hardware and software (SaaS) solution for self-service retail. 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 her business involving automated retail technology and self-service machines, the COVID-19 pandemic has resulted in increased demand for her company’s products, making her investor pitch that much easier. Dickson is the first Black woman to raise over $1 Million under SEC Regulation Crowdfunding (Reg CF) using a security token offering (STO). Currently in the middle of her second Reg CF, PopCom has raised $800,000 in about a month and a half.

‘The Jobs Act by Obama leveled the playing field and access to capital for businesses and allows leverage community from accredited and non-accredited investors,’ Dickson explains.

For early stage deals where a company is not yet publicly traded, she notes, ‘...an accredited investor needs to make $200,000 as an individual or $300,000 if you are married, and have $1,000,000 in net worth’.

Dickson notes these investors are the ‘...same people over and over again who are benefitting from the success of these early-stage companies where the wealth is circulated around the same group of accredited investors.’

Dickson explains she educated herself about how to do a crowdfunding campaign, as has been made possible by President Obama with the Jobs Act. She realized she had families, friends, and a community of supporters that were not accredited investors, but were educated investors with disposable income and understood the risks and rewards of an early-stage investment in a company.

See: 

SEC Gives Break on Crowdfunding Rules for Some Small Firms

How Regulation Crowdfunding Stood up to the First Weeks of Coronavirus – Almost Opposite of the Public Markets

That campaign, Dickson states, was the, ‘…First time people had really seen on a mass level a black person [who] does something like this,...[as I was the] first black female founder, first female founder to raise million dollars in a crowdfunding campaign,’ Dickson proudly proclaims. Her first crowdfunding campaign was oversubscribed, with $1.3 million, and now, she is at $800,000, closing in on the $1,070,000 limit for this campaign.

This time, her crowdfunding campaign provides equity in the company in the form of stock certificates and is not a token sale. While the last round was a token offering, Dickson comments the SEC does not fully support token offerings. ‘They act like they are okay with crypto and blockchain but their actions show the opposite,’ states Dickson. In that the benefit would be selling the tokenized shares for liquidity on a secondary trading platform, until the SEC decides to approve this, there is no real benefit to having a ‘crypto’ security token offering anyway. A token is a digital version of a share instead of a paper share; the primary benefit of using a token for funding is so you can sell the token for liquidity.

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NCFA Jan 2018 resize - How To Navigate Regulation Crowdfunding With Crypto And Blockchain The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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