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August 2015
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| IN THIS ISSUE: |
| CEC News |
| Fundraising Terror Tales! |
| Blogroll |
| Client News |
| Upcoming Events |
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CEC News
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Save the date!
Cutting Edge Community Happy Hour II
(a.k.a. Cutting Edge Cooler)
Sept. 24, 2015
 Our last open house was such a success that we’re having another one next month. We’re calling it “Cutting Edge Cooler” and it will coincide with the launch of our next DPO Boot Camp (see our announcement below). Join us for local food, drink, and live music from members of the Foxtail Brigade, and meet and mingle with the next cohort of future community capital raisers!
What: “Cutting Edge Cooler”
Date: 9/24
Time: 5-7 p.m.
Location: 436 14th St., Suite 1120, Oakland, CA 94612
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Join the fall DPO Boot Camp,
and start raising capital in early 2016!
 We’re excited. On September 23, our fall DPO Boot Camp officially kicks off with its first group conference call, followed by a “Cutting Edge Cooler” the next day (see above). Entrepreneurs interested in the Boot Camp can find out more by reviewing the DPO Boot Camp page on our website, where they can find a link to set up an initial call with a CEC team member to better determine their readiness to complete the program.
$500 Early Bird for individuals that sign up by August 24.
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Next capital raising webinar/ LIVE Q&A is on September 3
 Are you planning to raise capital? Get up to speed on your options – investment crowdfunding (a.k.a. “Direct Public Offerings”), private offerings (Reg D, 506c), Reg A, Reg A+, etc. Attend our webinar/LIVE Q&A with CEC’s senior management team: Kim Arnone, Brian Beckon, and John Katovich. Registration is available here.
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Vote for our panel at SXSW 2016! “Funding the Food Commons”
 For the second year in a row, we’ve entered a proposal to speak at South by Southwest in Austin, TX (last year we gave a talk at SXSW Eco called Direct Public Offerings for Healthy Communities). This year, our proposed panel, Funding the Food Commons, is about leveling the playing field for entrepreneurs and communities, starting with the food system. The panel proposal is open for voting on SXSW’s PanelPicker. With public voting accounting for 30% of the panel’s score, we need your help! Vote for our panel here.
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Fundraising Terror Tales!
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The Crowdfunding Platform Explosion
 Are all these new crowdfunding sites in full compliance with securities laws?
***More Fundraising Terror Tales!***
(Rated XYZ – Mentor Guidance Advised)
These days it seems there’s a crowdfunding platform for … well, just about everything. We all know the pioneers, Kickstarter and Indiegogo being chief among them, but there are many, many more platforms to choose from out there (at least 1,250 according to one report), and a new one seems to come online every day.
We think crowdfunding is perfectly suited to not only raise funds but also build community. Being crowdfunders ourselves (of the “investment crowdfunding” variety), we have seen firsthand how crowdfunding can help get projects off the ground and connect to a community of loyal supporters, while sharing profits with them in return.
There is no doubt crowdfunding has disrupted traditional finance, and revolutionized the way people raise funds. For that, we only have to take a quick look at the top-highest crowdfunding projects of all time: $87 million for “Star Citizen,” a video game (goal: $500,000); $20 million for “Pebble Time,” a smartwatch (goal: $500,000); and, our favorite, $13 million for the “Coolest Cooler,” the “Swiss Army knife” of coolers (goal: $50,000). We hope that those who gave so generously are feeling okay about for-profit companies that use the crowd in place of having to deal with those pesky investors that expect a return if a profit is made, but we also question the integrity of the approach if a company has no intention of sharing its profits with its backers.
And then there are the new “investment” crowdfunding sites we have been tracking. As with their predecessor donation-based crowdfunding platforms, new equity crowdfunding platforms formed under the various provisions of the JOBS Act of 2012 seem to crop up every day, promising growth capital for entrepreneurs and returns for investors. And on top of these new platforms, there is still the question whether the most highly anticipated and much-ballyhooed provision of the JOBS Act, Title III will ever come to fruition, providing equity crowdfunding for “the masses,” both accredited and unaccredited investors.
One example that recently caught our eye was an online retailer that launched a new crowdfunding platform that allows their independent retailers to post new “project” ideas they want to develop, with campaigns that include the scope, goals, and products they wish to offer, and then describe how receiving “funding” will help them to grow. The individuals that “fund” these projects will, hopefully, receive one of the products that are produced if the entire new project can get “funded.”
At first blush it looks very similar to other non-securities crowdfunding platforms-more of a pre-order approach for a product to be made once enough funds are received to make the product. What made this interesting to us, however, was how the company described this new platform. In their words, they said that this would provide “financing and product development” to the small businesses listed on their website, and they characterized this as a “viable and friendly alternative to traditional financing channels.” Suddenly we are now seeing new platforms moving from simply pre-ordering products to financing new businesses, with the online retailer taking a 3.5% fee on all of the financing if the new project reaches its goal, while the consumer simply receives a product.
Continue reading the Terror Tale here.
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Blogroll
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Affording Your DPO: 3 Ideas for Action
by Ariana Katovich, Director of Operations
 By now we have learned that community capital is real and can be raised and invested in local businesses through Direct Public Offerings. Working with us a business can structure a round of capital raising ranging from $250,000 to $10,000,000 using this tool. The irony is that sometimes a business with the right plan to attract $5 million in investment capital has a hard time raising the initial funds to structure their DPO in the first place (costs range from $15,000 for our DPO Boot Camp to $25,000 for a 1-on-1 DPO “soup to nuts”).
You may be reading this and shaking your head at the thought of coming up with $15,000 dollars, a difficult investment to make today even though it has the potential to raise a game-changing amount of investment capital in 9-12 months (the amount of time it can take to get your DPO approved and to start raising capital). Luckily, we have a few out-of-the-box ideas for how to help fund your DPO.
Read the full post on affording your DPO here.
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Client News
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ShopCity.com founder Colin Pape on KALX 90.7 FM’s Method to the Madness
 Colin Pape, CEO and Co-Founder of ShopCity.com, was recently featured on the KALX 90.7 FM show Method to the Madness featuring innovators of the Bay Area. Located in Berkeley and Canada, ShopCity.com was founded by Colin Pape to help local businesses leverage the internet to compete against online retailers like Amazon.com and other global chains. ShopCity’s mission is to create thriving local communities with strong, prosperous economies.
Listen to the interview here.
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Online Investment Tool and
Client DPO Update!
 The clients below received approvals from their respective state regulators and have begun their fundraising campaigns. For more information about them, and how they are using our Online Investment Tool (OIT) to help investors review and subscribe to their DPOs, go to CuttingEdgeX.com.
Dorchester Community Food Co-op: MA residents; $28,500 (out of $500k)
Green City Growers: MA residents; $97,500 ($300k)
Maker’s Common: CA residents; $105,000 ($600k)
My Trail Company: CO residents; $19,500 ($500k)
What’s the OIT? Check out a video demo of it here.
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Upcoming Events
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NewCo Festival
Oakland, CA
October 8, 2015
 NewCo produces festivals in cities around the world, celebrating innovative businesses. NewCo “host companies” open their doors to the community for a one-hour experiential session to share their company’s mission and vision of the future. Cutting Edge Capital will be hosting a session at this year’s inaugural NewCo – Oakland festival.
On October 8, join Cutting Edge Capital Founder and President John Katovich as he takes you on a tour-de-force presentation of our broken public and private capital markets, and how the Direct Public Offering, or DPO, provides a capital funding solution that benefits everyone.
Please refer to our NewCo event page for ticketing information.
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Cutting Edge Capital is a consulting firm and innovation center that works to redirect the flow of resources and wealth from Wall Street to Main Street and to preserve it for future generations. CEC is pioneering tools for a more inclusive economy, sustainable communities, and healthy ecosystems.
As a certified B Corporation and Alameda County Green Business, we are dedicated to the sustainability of our clients, staff, community, and the environment. We invite you to visit our website to learn more about who we are and what we do.
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