2C SUNDAY, MAY 13, 2018
COM
Crowdfund investing
proves no bonanza
BY JOYCE M. ROSENBERG
AP Business Writer
NEW YORK — Begun
two years ago with some
big hopes, the option
for small businesses to
court investors through
crowdfunding hasn't
turned into the windfall
its supporters predicted.
"A lot of dollars have
been raised in crowd-
funding, but it has not
been the bonanza peo-
ple have been expect-
ing," says David Lavan,
a former Securities and
Exchange Commission
attorney who's now with
Dinsmore & Shohl in
Washington, D.C.
Some 438 companies
have raised $105 mil-
lion since May 16, 2016,
when the first websites
where companies' shares
are sold began operating,
according to the con-
sulting firm Crowdfund
Capital Advisors. There
are now 41 sites. On one,
Wefunder, businesses
have raised $15 million
in the last 18 months,
but that's about half the
amount hoped for.
Another disappoint-
ment: About half the
investors are custom-
ers of the companies and
want to support their
favorite brewer or app
maker or back a movie
project — they're not the
average small investors
crowdfunding was sup-
posed to appeal to.
"There's not a lot of
people out there saying,
'Gee, we want to invest
in startups,'" says Nick
Tommarello, CEO of
Wefunder.
Limiting factors
Some of what's held
crowdfunding back are
legal limitations and
requirements, designed
to protect investors who
may be unfamiliar with
the risks of committing
money to young com-
panies without proven
track records.
Companies can raise
up to $1 million, and
individuals with income
or net worth under
$100,000 can invest a
total of $2,000 in one
or more businesses in a
12-month period. Busi-
nesses must comply with
Securities and Exchange
Commission require-
ments including finan-
cial and disclosure doc-
uments, although the
paperwork is far less than
what companies com-
plete when they're going
public
Daplie, a maker of
computer servers that's
based in Provo, Utah,
Open up more than the books with your financial adviser
BY BARBARA MARQUAND
NerdWallet
You found a good
financial planner to help
you manage money and
achieve your goals. Con-
gratulations, that's a big
step.
Now comes a leap —
opening up about money.
There's a reason it's called
"personal" finance. Almost
everything about your life
can influence your finan-
cial decisions, so get ready
to talk about more than
dollars and cents.
"The more open our
clients can be, the bet-
ter the planning we can
do for them," says Emilie
Schaffer, a certified finan-
cial planner and associate
wealth adviser with Buck-
ingham Strategic Wealth
in St. Louis.
Working with an adviser
goes beyond hand-
ing off financial docu-
ments. Here's what you
can and should share
when meeting with a
Justin Shelby, CEO of Artichoke, a company that sells an app to help business owners
manage their companies, poses for a photograph in Baltimore. [AP PHOTO]
has done two success-
ful crowdfunding cam-
paigns that have helped
the company avoid tra-
ditional venture capital
investors and be more
independent, President
Brian Bourgerie says.
"If we can crowdfund
our way to an IPO (initial
public offering) or what-
ever success, that's the
way we'd like to do it," he
says.
But people involved
in crowdfunding say the
regulations prevent it
from becoming a wind-
fall for young companies.
Businesses still need
legal and accounting help
to prepare documents
and financial statements.
The tens of thousands
of dollars that may cost
can eat into the money
they raise, says Ryan
Feit, CEO of SeedInvest,
another crowdfunding
website.
"It's a significant regu-
latory burden imposed
on very small compa-
nies," he says.
Preparing for an offer-
ing is also a lot of work
on top of already running
a company, Bourgerie
says.
"You have to come up
with a marketing plan,
interact with inves-
tors and customers, like
a mini-business. It's
not something anyone
should just jump into,"
he says.
The $1 million limit on
money raised also is a
potential problem. Some
companies can easily
reach it. And those that
surpass their goals, even
if they're below $1 mil-
lion, are required to turn
away investors who try
to sign up after that total
is met.
When Ron Wilson's
athletic wear company,
Hylete, aimed to raise $1
million last year, it got
$1.3 million in offers for
financial adviser.
The facts — all of them  This goes deeper than
Your financial adviser
will request documents
as you start working
together. That can include
anything from account
statements and tax returns
to how much you make
and how much you owe.
The list might be broader
than you expect. Be pre-
pared to share more than
your 401(k) statement
even if you think you only
need retirement advice.
"The best result is when
a client is willing to share
all the relevant informa-
tion." says Carl Goodin, a
certified financial planner
and president of Financial
Planning Associates Inc. in
Ellisville, Missouri.
That includes even those
investment accounts the
planner won't manage,
Goodin says. Knowing
the full scope will help an
adviser create a properly
diversified plan.
its shares.
"We couldn't take the
other $300,000. Our
customers were upset,"
says Wilson, whose com-
pany is based in Solana
Beach, California.
Another issue is an SEC
rule that requires com-
panies to register their
securities with the gov-
ernment — essentially
going public — if they
have $25 million or more
in assets and more than
2,000 investors or over
500 who are not "accred-
ited" to specific stan-
dards of expertise.
That rule, an expen-
sive proposition, is a
barrier to companies'
growth, Tommarello
says. Bourgerie is also
concerned about the rule,
though it does give com-
panies that reach the limit
two years to get their
securities registered.
"We're going to hit it
at some point," he says.
"Luckily it's not the like
the day you hit it you
have to comply, but's
that's something we have
to be aware of."
Not for everyone  could be a game-changer
Darian Ibrahim, a law
professor with expertise
in securities, isn't con-
cerned about the draw-
backs and relatively
slow start crowdfund-
ing investing has had. He
thinks it's been success-
ful for some companies
that are just too young to
get professional investor
money. And he's also not
worried that the general
public hasn't latched on
to the concept.
"I don't buy the prem-
ise that this is for every-
one," says Ibrahim, who
teaches at the law school
of the College of William
& Mary. He noted that
most people, including
professional investors,
aren't very good at pick-
Goals and values
generalities such as "I want
to save more" or "I want to
have a comfortable retire-
ment."
"It's not just looking at
numbers," says Therese
Nicklas, a certified finan-
cial planner and owner
of The Wealth Coach
for Women in Rockland,
Massachusetts. "You want
to know what those num-
bers are for."
Be prepared to think
through such questions
as: What and who is most
important to you? What
do you want to do with
the rest of your life? What
keeps you up at night?
Clients often pause
when asked these ques-
tions, Schaffer says. "They
often come in thinking
they're just going to talk
about retirement goals
and planning."
Your values give a
financial picture color
and shape. "The purpose
ing winners among newer
companies.
Many small compa-
nies bypass crowdfund
investing and raise money
instead on sites like Indi-
egogo and GoFundMe
that don't require paper-
work and that have no
limits. But having inves-
tors is appealing to Jus-
tin Shelby, CEO of Arti-
choke, which sells an app
to help business owners
manage their compa-
nies. Investors who are
excited about the com-
pany, including those
who are customers,
become ambassadors for
its brand, he says.
Artichoke's first cam-
paign, which ended Mon-
day, attracted 81 inves-
tors and $51,885, nearly
half its $107,000 goal;
Shelby was satisfied with
the amount raised.
The company is in Bal-
timore, far from the tech-
nology investor hubs of
Silicon Valley and New
York, but crowdfund-
ing isn't dependent on
geography. "Because it
potentially deregional-
izes access to capital, it
for a lot of companies,"
Shelby says.
The crowdfunding
industry is hoping that
Congress and the SEC
change some of the rules.
Tommarello expects
the SEC will review its
regulations after several
years of assessing their
impact. And bills have
been proposed in Con-
gress to modify some of
the requirements and
allow companies to raise
more than $1 million,
but the legislation hasn't
had support in both
houses and doesn't look
to become law anytime
soon.
"It's very challenging
to get changes in Wash-
ington right now," Feit
says.
is to get to know clients
as individuals, as human
beings," Schaffer says.
"There's nothing off the
table."
Experiences with money 
Attitudes about money
get established early, so
don't be surprised if a
planner asks about your
earliest money memo-
ries. Knowing about your
background can help your
planner understand your
perspective — and can also
bring biases to the surface.
"A client will say, 'Don't
talk to me about real
estate. I bought a rental
property one time, and I
took a big loss.' Or 'Don't
talk to me about stocks. I
bought a stock one time,
and it went down and
I took a loss.' Or 'Don't
talk to me about bonds.'"
Goodin says. "This allows
me to address misunder-
standings that may occur.
My job is largely one of
education."
THE OKLAHOMAN | NEWSOK.
BUSINESS PEOPLE
Peters & Chandler, P.C., hires
Tanner Coburn as audit
senior, and Ara Grigorian
as audit staff. Coburn
graduated in 2015 from
the University of Central
Oklahoma with a Bachelor
Tanner Ara of Science in Accountancy.
Coburn Grigorian He previously worked in
commercial lending and
has prior public account-
ing experience auditing governmental and financial
institutions. Coburn’s duties are related to auditing
an array of clients ranging from nonprofit to oil and
gas. Grigorian earned a bachelor’s degree in business
economics with an accounting emphasis from the Uni-
versity of California Santa Barbara. His duties involved
auditing financial statements.
Edmond-based accounting firm Arledge
and Associates promotes Bailey Erickson to
audit specialist. Erickson is a graduate
of University of Central Oklahoma with
a bachelor’s degree in accounting and
finance. In her new role, Erickson will
assist on diverse audit responsibilities
and perform various audit and testing Bailey
procedures to ensure consistency for Erickson
clients.
U.S. Cellular names Chandler Sills sales
manager for the Quail Springs store
in Oklahoma City at 2130 W Memorial
Road. Sills leads store associates to help
customers and businesses select the
best plan and devices to meet their data
needs. Sills has more than nine years of
Chandler wireless/sales experience. Sills previ-
Sills ously served as a sales manager at Best
Buy and has been working in wireless
technology for four years.
Renee’ Manning, a paralegal with more
than 27 years of experience, joins
the law firm of McAfee & Taft and will
provide comprehensive legal support to
attorneys engaged in a broad range of
transactional matters. Before joining the
firm, Manning’s career included working Renee’
for one of the nation’s largest wholesale Manning
grocers, a publicly traded biopharma-
ceutical company, a boutique law firm specializing in
biotechnology, and an Oklahoma-based civil law firm.
Her broad legal experience includes the areas of securi-
ties law, business and commercial transactions, real
estate, entity formation, taxation, and related litigation.
Jacqueline Pereira-McDaniel joins Edmond-
based communications firm Price Lang
Consulting as senior project director.
McDaniel earned her undergraduate
degree in sociology from the University
of Central Oklahoma and her master’s
degree in human relations from the
Jacqueline University of Oklahoma. She serves
Pereira- the Oklahoma Commission on Children
McDaniel and Youth as well as the Oklahoma City
Homeless Youth Alliance and has previ-
ously served the Young Nonprofit Professionals Network
of OKC, Youth and Family Council, Oklahoma Depart-
ment of Mental Health and Substance Abuse Services
and the Interagency Council for the Prevention of Ado-
lescent Pregnancy and Sexually Transmitted Diseases.
Jarod Conrady has been appointed physi-
cal security solutions manager at United
Systems, an Oklahoma-based technol-
ogy solutions company. Conrady has
20 years of experience working in all
aspects of physical security from locks
and hardware to advanced IP video
surveillance and analytic detection. Jarod
Most recently, Jarod has specialized in Conrady
proactive video analytics detection and
monitoring. At United Systems, he will focus on physical
security systems at both schools and small businesses.
Conrady earned a bachelor’s degree in organizational
leadership from University of Central Oklahoma.
FROM STAFF REPORTS