Meet The Future of Equity Crowdfunding

Group of Business People in Office BuildingWe are in the midst of a technology revolution that is changing the way entrepreneurs launch businesses, access and manage information, attract talent and achieve their dreams. The cloud is central to this evolution, and it is facilitating new and unique ways to connect business owners to the resources needed to thrive. Guest contributor Richard Swart, CSO of NextGen Crowdfunding, is a leading authority in the crowdfunding industry, which is undergoing an exciting transformation that will change the way small businesses pursue and access capital — a consistent pain point in the entrepreneurial journey. If you plan to attend this year’s SXSW, check out his speaking engagement as part of the NextGen House Crowdfunding Launch Fest at Maggie Mae’s. His commentary is another proof point that now is an incredibly exciting time to be a small business owner.

-Cindy

Meet The Future of Equity Crowdfunding
By Richard Swart, CSO of NextGen Crowdfunding

In a lab long ago, the first computer scientists leveraged the communications functionality of a new tech infrastructure, called ARPANET, to send a message. They likely had no idea what their innovation would create for the future of technology. Years later, as access to ARPANET was expanded and became the Internet as we know it, this same base communications functionality has empowered Twitter, Facebook, email, and other digital communication tools. The evolution from those early days to the globally and socially connected world we live in today, is unprecedented.

It’s through this dynamic that today’s disruptive models in business financing are now igniting. Access to capital — once limited by special access to corporate entities, banks, and wealthy investors — has now been democratized. A new era of financing is happening now, sparking a changing economy defined by access to money for those seeking the American dream.

Among the most exciting aspects of this future of finance is the power of equity crowdfunding. Rewards-based crowdfunding platforms have already helped to give opportunity and access to capital for entrepreneurs across multiple industries. As the new Title III of the JOBS Act — the 2012 federal law to help encourage small business funding in the United States — moves into effect this year, the democratization of finance will reach new heights. Everyday people can now become everyday investors who can receive equity stakes in return for crowdfunding contributions, for the very first time in history.

But, it is not without challenges and risks. Successful outcomes require more than just due diligence. Entrepreneurs and investors must be and remain well-educated and well-versed, with trustworthy, reliable, and experienced resources. Thought leadership will be critical in this emerging and fast-moving market. It’s equally important to keep an eye on the future. Here’s a look at what’s ahead:

  1. Regulation Consideration: Title III allows investment in startups by individuals regardless of their income or net worth for the first time in nearly 80 years. For both entrepreneurs and investors, Title III is predominantly in your favor. But it may be important to be aware of additional supporting legislations, both at the state and national levels in the coming years. This won’t slow down equity crowdfunding’s potential, but it is where having solid resources for information and guidance can count.
  2. The Changing Face of Crowdfunding: As equity crowdfunding grows and matures, investment opportunities, companies and entrepreneurs will increase and evolve. Currently, a large number of tech and web startups dominate the crowdfunding industry. Equity crowdfunding has the potential to help additional businesses in many sectors; small mom-and-pop shops, restaurants, and neighborhood stores. And minority and women-owned businesses will continue to benefit from the democratization of finance through crowdfunding. Explore your options and be open to the potential of these new areas the industry will reach.
  3. Consolidation in the Market: With Title III leading to increased deal flow in equity crowdfunding, an influx of upstart platforms is sure to follow. We’ll likely see a flurry of new platforms and then rapid consolidation in the market. Platforms will emerge but larger, established financial institutions will also likely seek a foothold in the equity crowdfunding space. It’s not outside of the realm of possibility that we could see a Goldman Sachs or JP Morgan buy a stake in an equity crowdfunding platform. The corporate interest in crowdfunding as a financial tool has only just begun, and this is sure to grow with the new Title III rules.

This is an exciting time for investors and entrepreneurs considering equity crowdfunding. As the new era of crowdfunding arrives, information will be critical as we all maneuver in this new financing world. I will be speaking about all of these topics at the “Ignition 1.0” Crowdfunding Launchfest at SXSW later this month and encourage anyone interested in participating to reach out via the comments below or at NextGenCrowdfunding.com.

How to shift from being customer-focused to being customer-obsessed

7.30.15As we begin another year in what Forrester calls “the age of the customer,” many SMB owners aren’t quite clear on what they can do to take their businesses to the next level in 2016.

You might feel as though you’ve already covered the basics — you’ve upgraded your hardware, moved to the cloud and incorporated a basic CRM tool.

It’s a good start, but the year ahead will demand that you shift from customer-focused to customer-obsessed.

Continue reading on Business Journals…

Microsoft celebrates National Entrepreneurship Week with Scott Duffy and the stories of our nation’s entrepreneurs

Biz owners small for blogComing from a family of entrepreneurs, I’ve experienced firsthand the unmatched dedication and drive business owners bring to fulfill their dreams every day. National Entrepreneurship Week, kicking off Feb. 22, is an opportunity to formally celebrate this group, show our support and share stories of triumph over adversity.

Microsoft is passionate about empowering small businesses to thrive. With resources and technology, we help spark innovation and fuel growth, and we continuously seek out like-minded people who foster entrepreneurial growth. This year, we’re partnering with Scott Duffy, Inc.com contributor and best-selling author of LAUNCH!, a blueprint for entrepreneurs to launch and build successful companies, as well as Alan Taylor, award-winning radio and TV host, to create a video series that features the stories of entrepreneurs who have successfully launched and grown a variety of businesses.

Each business owner shares the challenges, accomplishments and lessons learned that have made them the entrepreneurs they are today. From insights on how to launch products and inspire creativity to guidance on securing capital and building business relationships, every entrepreneur has unique experiences that can motivate small business owners at every stage of the journey.

From Feb. 22-26, we will share three new videos each day at aka.ms/entrepreneurs. The site also features free resources to help every small business grow and thrive, including:

  • Downloadable eGuides
  • Webinars and video content
  • Events taking place at select Microsoft Stores nationwide
  • Links to social channels and organizations for small businesses

Continue to check back at aka.ms/entrepreneurs for new and exciting content every day during National Entrepreneurship Week. In addition, join the National Entrepreneurship Week conversation on Twitter by following #MSFTLaunch, and tweet me @Cindy_Bates to share how you’ll celebrate.

Using Vendor Credit Terms to Build Your Credit and Your Business

Capital tends to be in short supply for new or growing businesses, and that is why many entrepreneurs devote lots of time, and sometimes stress, to securing funding. Most SMB owners realize that while there are dozens of ways to go about getting the money you need — everything from cashing in a 401K to borrowing from family — there are three main forms of credit to help get you there: credit cards, bank loans and vendor credit. The latter is probably the least familiar but that doesn’t mean it should be overlooked. In the below post, guest contributor Ty Kiisel, an author with 25 years of experience helping businesses achieve financial success, discusses the importance of vendor credit. Be sure to read Ty’s previous posts on microlending and loan rejection.

–Cindy

 

Vendor credit is a valuable source of short-term capital that often gets overlooked in discussions about small business financing. This is unfortunate, because vendor credit can be an important tool to build a strong business credit profile as well as valuable capital to help you grow your business.

Fortunately, getting short-term credit terms (often 30 or 60 days) from your vendors and suppliers is relatively simple — it’s often just a matter of asking. Your suppliers want your business to succeed almost as much as you do and often offer payment terms to their small businesses’ customers. This is particularly beneficial to new businesses that can’t otherwise get a small business loan.

Vendor Credit vs. Personal Credit

It’s sometimes tempting for small business owners to use their personal credit for business purposes—but that could be a mistake. For example, it’s not uncommon for business owners, particularly of new businesses, to use their personal credit cards to pay for business expenses. The credit is available, it’s expedient, and it’s convenient. Unfortunately, it could hurt your personal credit score and does nothing to build a strong business credit profile.

While some lenders still rely heavily on a business owner’s personal credit score when evaluating their creditworthiness, business owners should make building a strong business credit profile a priority. While it might not lead to a $100,000 business loan today, it is a good way to build a strong foundation, which can make it easier to get a small business loan down the road.

How does vendor credit help build my business?

Because obtaining traditional business credit, like a small business loan, can be a challenge, vendor credit provides an opportunity to finance inventory or other purchases for 30 days (or other terms depending upon the vendor). This in effect enables the business owner to access short-term borrowed capital. Many small business owners are able to leverage these payment terms as a sound method of financing within their businesses.

Additionally, some vendors even offer discounts for prompt payment. A 2 percent discount for paying a 30-day invoice in 10 days can improve margins or provide the capital to pay other expenses.

Making the most of vendor credit opportunities

While negotiating payment terms with a vendor is often easier for a small business owner than finding success at the local bank, maintaining a successful relationship and maximizing the value of this form of business credit doesn’t happen automatically. Here are three things you can start doing today to establish healthy trade relationships with your suppliers and make the most of the relationship:

  1. Make sure you pay all of your vendors on time. While this is pretty obvious, it’s one of the most important things you can do to build a good relationship with your vendors while building a strong business credit profile. If your vendors report to the business credit bureaus (which you should ask about), your good payment practices will help you build a strong business credit profile. Conversely, if you don’t, it can quickly hurt your profile.
  2. Establish vendor credit relationships early in your business. For many business owners, using personal credit in the early years is hard to avoid, but you should stop as soon as possible. Vendors are often willing to establish credit accounts for new businesses, but if you’re unsuccessful with your vendors, look for other places like Home Depot, Lowes or Staples that sell products that small business owners regularly use, and are willing to establish business credit relationships. This is important because the length of your credit history is important down the road. The longer the better. Lenders are looking for a track record and a history of successfully working with your vendors.
  3. Be upfront with your suppliers when necessary. A few years ago, I spoke with a business owner who made some inventory mistakes in the early years of his business and found himself in trouble and unable to meet his obligations. Because he was a good customer and his suppliers didn’t want to see him fail, they were able to offer him different and extended terms to help him become current. While this wasn’t ideal for either his company or the vendor, because he was upfront and brought the vendor into the loop early, he was able to save the vendor relationship and dig out from under his challenges.

Don’t ignore the opportunities presented by your vendors when considering financing options—particularly when financing inventory or other supplies. It’s a great way to build your business credit profile and a valuable source of credit that can help you achieve your business goals.

About the Author
Ty Kiisel is a contributing author focusing on small business financing at OnDeck, a technology company solving small business’s biggest challenge: access to capital. With over 25 years of experience in the trenches of small business, Ty shares personal experiences and valuable tips to help small business owners become more financially responsible.

3 great entrepreneurial resources for military vets

Vets 2.11.16Increased access to technology and funding are fueling an entrepreneurial renaissance of sorts. In fact, according to the Kauffman Index of Entrepreneurship, small business activity is on the rise in 49 of the 50 U.S. states.

Here’s what you might not know: Veterans are twice as likely to take the leap into entrepreneurship as civilians.

Currently, one in 10 small businesses is started by a veteran, and about 20 percent of small business employees work for veteran-owned businesses, according to the Small Business Administration.

Continue reading on Business Journals…

Finalists Announced for the 2nd Annual InnovateHER Competition

Women entrepreneurs are a force to be reckoned with, and their impact on the economy continues to grow. According to a recent Forbes article, this is the golden age for women entrepreneurs. Geri Stengel writes, “Economists and academics agree women entrepreneurs are an under-tapped force that can rekindle economic expansion. Women are becoming more entrepreneurial. Women own 36 percent of all businesses, according to the 2012 U.S. Census — a jump of 30 percent over 2007.”

To support this growing field of entrepreneurs, once again Microsoft is teaming up with the U.S. Small Business Administration for the second annual National InnovateHER: Innovating for Women Business Challenge, designed to honor and award women whose products and services are poised to change the landscape of their respective industries.

More than 180 semi-finalist nominations have been narrowed down to 10 exceptional entrepreneurs, who will each pitch their products and ideas to a panel of expert judges. The competition will take place in Washington D.C. on March 17 as part of the InnovateHER: Innovating for Women Business Summit, a national symposium that provides an opportunity for women-owned small business owners to better identify opportunities for women’s entrepreneurship, learn about the available tools and resources and make connections to other successful women entrepreneurs. Microsoft and the SBA will award three winners with prizes totaling $70,000. Finalists include:

  • Dr. Agnes Scoville from Scoville & Company (Pacidose), St. Louis, Mo.: Pacidose allows mothers and caregivers to accurately dose and deliver medicine to babies through a soft pacifier nipple.
  • Anna Daily from Ascendant DX LLC (Melody), Springdale, Ark.: Melody is a simple and highly effective diagnostic to detect early stage breast cancer by identifying specific protein biomarkers present in tears.
  • Jennifer Shipp from Brilliant Inventors LLC (Knife Glider), Mission, Texas: The Knife Glider is a cutting shield that has been statistically proven to reduce the probability of being injured or cut when preparing food with a knife by more than 90 percent.
  • Sascha Mayer from Mamava, Inc., Burlington, Vt.: Mamava makes freestanding lactation suites and other design solutions for nursing mothers on the go.
  • Marissa Siebel-Siero from IntelliWheels, Inc. (Tinker), Champaign, Ill.: Tinker is the first ever 3D product configurator in the wheelchair marketplace that gives customers feedback and control.
  • Susan Leary Shoemaker from Undercare, Inc., Bronxsville, N.Y.: Undercare offers innovative undergarments that accommodate persons who have difficulty dressing.
  • Cassandra Curtis from Once Upon a Farm, San Diego, Calif.: Once Upon a Farm creates quality, eco-friendly and nutritious baby food products for children.
  • Dr. Pu Wang from Vibronix, Inc. (MarginPAT), West Lafayette, Ind.: MarginPAT is an intraoperative assessment of breast tumor margin using photo acoustic/ultrasound imaging system.
  • Dawn Dickson from Flat Out of Heels, Miami Beach, Fla.: Flat Out of Heels are a convenient way for women to relieve stiletto sore feet on the go.
  • Elizabeth Caven from UpCraft Club, Des Moines, Iowa: UpCraft Club is changing the way digital goods are found and sold using a patent-pending process allowing brick and mortar retailers to receive revenue from the sale of a digital good.

I am eager to hear from each of these creative business leaders, who are working hard to innovate products and brands that range from ecommerce to healthcare. For details on the InnovateHER competition, visit www.sba.gov/innovateHER. This site will be updated as we approach the finals in March 2016.

Good luck to all finalists!

Employee Devices Bring Added Security Concerns

Blog 1.25.16The explosion in recent years of mobility solutions and employee’s bringing their own devices has had a big impact on small businesses. In fact, 52 percent of information workers across 17 countries report using three or more devices for work, according to research from Forrester and 61 percent of workers mix personal and work on their devices.

On one hand, there are huge benefits for organizations and employees — employees can be far more productive and work on the go with untethered access to the information they need. Business owners can also realize cost savings while reducing the time spent managing IT.  Yet, there are risks: namely, how do businesses protect confidential information from leaking outside of the organization when employees can access and store data in a multitude of ways across devices.

When employees use personal devices for work, they can be mishandled inadvertently, like an accidental forward of a confidential mail, or in more nefarious ways, such as a hacker gaining access to confidential information through stolen credentials.  According to a Verizon data breach investigation report, 75 percent of network intrusions used weak or stolen credentials to gain access.

It’s important to have a strong device policy in place but even when the rules are clear, there is room left for costly errors. CEB found that as many as 93 percent of employees admit to violating information security policies. That means, depending on your business, there is a wide variety of data that could be at risk.  It may be customers’ personally identifiable information, such as in healthcare, retail or financial institutions, or company confidential information, such as trade secrets, company financials, or employee records.  With so much data available, traditional company firewalls and perimeter solutions no longer suffice to protect confidential information wherever it lives.  Today, many small businesses are cobbling together a number of solutions to attempt to solve this problem.  But none tie it all together until now.

Microsoft has developed Microsoft Enterprise Mobility Suite (EMS), which is the only comprehensive solution that protects information assets across four layers: user identity, content, applications & cloud services, and devices.  When combined with Office 365, it offers native protection for applications and services. Best of all, it’s about half the cost of competitive solutions. Not only is EMS flexible and easy to integrate, it offers enterprise-grade security for small businesses. Key security features include:

  • Threat detection: Detect abnormal user behavior, suspicious activities, known malicious attacks and security issues right away.
  • Conditional access: Control access to applications and other corporate resources like email and files with policy-based conditions that evaluate criteria such as device health, user location etc.
  • Single sign-on: Sign in once to cloud and on-premises web apps from any device. Pre-integrated support for Salesforce, Concur, Workday, and thousands more popular SaaS apps.

To learn more about protecting your business, click here. Ready to integrate EMS? Use our Pinpoint site to help you find a partner.

1.25.16

 

The webcast you need to start your year off right

1.22.16 blogIn business, how you start the year is likely a good indication of how you’ll finish the year. If you don’t start with defined goals, it will be difficult to measure success or identify areas for improvement before it’s too late.

Need help? The Office Small Business Academy is a new, monthly educational and thought leadership webcast series created for small business owners as a source of ideas, inspiration and smarter ways of running a business.

On the premiere episode, January 26, a trio of entrepreneurship and technology experts will offer practical advice and valuable, real life anecdotes about planning for success, staying motivated and taking advantage of new tools to help you set 2016 up for success.

Register now  for this not-to-be-missed webcast featuring serial-entrepreneur Evan Carmichael; GigaOm Research Managing Director Stowe Boyd and CNBC contributor Carol Roth.

Employee Devices Bring Added Security Concerns

1.11.16The explosion in recent years of mobility solutions and employee’s bringing their own devices has had a big impact on small businesses. In fact, 52 percent of information workers across 17 countries report using three or more devices for work, according to research from Forrester and 61 percent of workers mix personal and work on their devices.

On one hand, there are huge benefits for organizations and employees — employees can be far more productive and work on the go with untethered access to the information they need. Business owners can also realize cost savings while reducing the time spent managing IT.  Yet, there are risks: namely, how do businesses protect confidential information from leaking outside of the organization when employees can access and store data in a multitude of ways across devices.

When employees use personal devices for work, they can be mishandled inadvertently, like an accidental forward of a confidential mail, or in more nefarious ways, such as a hacker gaining access to confidential information through stolen credentials.  According to a Verizon data breach investigation report, 75 percent of network intrusions used weak or stolen credentials to gain access.

It’s important to have a strong device policy in place but even when the rules are clear, there is room left for costly errors. CEB found that as many as 93 percent of employees admit to violating information security policies. That means, depending on your business, there is a wide variety of data that could be at risk.  It may be customers’ personally identifiable information, such as in healthcare, retail or financial institutions, or company confidential information, such as trade secrets, company financials, or employee records.  With so much data available, traditional company firewalls and perimeter solutions no longer suffice to protect confidential information wherever it lives.  Today, many small businesses are cobbling together a number of solutions to attempt to solve this problem.  But none tie it all together until now.

Microsoft has developed Microsoft Enterprise Mobility Suite (EMS), which is the only comprehensive solution that protects information assets across four layers: user identity, content, applications & cloud services, and devices.  When combined with Office 365, it offers native protection for applications and services your customers use every day. Best of all, it’s about half the cost of competitive solutions. Not only is EMS flexible and easy to integrate, it offers enterprise-grade security for small businesses. Key security features include:

  • Threat detection: Detect abnormal user behavior, suspicious activities, known malicious attacks and security issues right away.
  • Conditional access: Control access to applications and other corporate resources like email and files with policy-based conditions that evaluate criteria such as device health, user location etc.
  • Single sign-on: Sign in once to cloud and on-premises web apps from any device. Pre-integrated support for Salesforce, Concur, Workday, and thousands more popular SaaS apps.

To learn more about protecting your business, visit Microsoft Enterprise Mobility or watch this video. Ready to integrate EMS? Use our Pinpoint site to help you find a partner.

A few of my favorite things for 2015

Fav Things 2015 smallIt’s likely that, by now, you’ve checked the vast majority of items off your holiday gift list. You’ve braved lines and searched for hours online to purchase items for everyone from your parents to your mailman. While there may be a few lingering, hard-to-shop for people on your list, there’s one person I hope you won’t forget this year — YOU!

As an SMB owner you’re used to taking care of other people’s needs — everyone from customers to vendors. That’s why, once again, I’ve pulled together a list of my favorite things to gift yourself or to request from family and friends. You’ve worked hard to make it a great year. The items listed below can help you make 2016 even better.

  • Surface Pro 4 — Recently named Tablet of the Year by Yahoo Tech, the Surface Pro 4 “has enough horsepower inside to handle nearly every task you throw at it.” It’s light, mobile, and with the multi-position kickstand and an improved Type Cover, it transforms into a fully functioning laptop running desktop software.
  • Revolar — This is the next innovation in wearables. Unlike wearables that track your steps or sleep, Revolar’s only job is to help keep you safe. SMB owners often work late hours or make deposits alone. If you are ever in danger, simply press the button on Revolar and an emergency alert message with your location information will be sent to your loved ones. I’m impressed by the story behind this product, which was cultivated through the Techstars startup incubator.
  • Windows 10 — Sometimes the best gifts don’t cost you a penny. That’s the case with Windows 10, which is available as a free upgrade with a qualified Windows 7 or Windows 8.1 device. With Windows 10, you can see your open tasks in a single view and create virtual desktops or group things by project, like Office apps for work. Best of all, Cortana is like having your own personal assistant, working across devices to help you get things done.
  • Trakdot — Busy business travelers know that there are few things worse than the sinking feeling you feel when the last piece of luggage comes out of the baggage carousel and you realize your bag is lost. With Trakdot, you can track your luggage after takeoff using its newly patented micro-electronics and ground-based cellular telephone technologies to track and report the whereabouts of your luggage straight to your mobile device.
  • A Vacation — With the shift towards a cloud and mobility increasing our productivity, many SMB owners, such as Mike Holwick of Holwick Constructors, are finding they have a bit more free time to do the things they want to do instead of the things they have to do. This year, for the holidays, I’m taking my family on a cruise from Miami to LA through the Panama Canal with stops in Costa Rica, Guatemala and Columbia. Whether it’s an exotic retreat or a staycation closer to home, time spent creating memories is time well spent.
  • Supporting Veterans — The warm feeling you get from helping others can often be more satisfying than any gift. The holiday is a great time to support the brave veterans who have risked their lives for ours. Donations to organizations such as the Semper Fi Foundation make a big difference to wounded veterans. Through the Wounded Warrior Project, you can donate, host an event or simply write a thank you card to a wounded soldier. You can also seek out a Veteran owned small business for gift ideas such as the Bottle Breacher, which recently made its Shark Tank debut.

Have a favorite item from this list or another suggestion for the SMB owner in your life? Tell me about it in the comment section.