Manny Fernandez, Bill Reichert and Bow Rodgers each provide a unique perspective to on the evolution of crowdfunding for startup companies, defining the opportunities and challenges for raising investment capital from accredited and unaccredited investors.
October 14th, 2015: DreamFunded.com has announced its' first portfolio exit. One of DreamFunded.com's portfolio companies, Connected Data has been acquired by a public cloud computing company Imation IMN (NYSE). Connected Data has made its mark on the cloud computing industry with its highly rated enterprise file sharing hardware solutions. DreamFunded.com CEO Manny Fernandez said the on its recent acquisition; “We are very excited about Connected Data’s acquisition, it is a true testament to our the level of quality tech companies we offer at DreamFunded.com. This is the first of many exits we will have on the DreamFunded platform.” DreamFunded is one of four online funding platforms to achieve a portfolio exit.
DreamFunded provides investor access to proven pre-IPO companies as well as liquidity for tech employees. Sign up today for a free membership at www.DreamFunded.com.
Helsinki based Invesdor has formed a new partnership with Silicon Valley based DreamFunded. As part of the agreement, DreamFunded founder Manny Fernandez invested an undisclosed amount in the debt and equity crowdfunding platform. The investment was announced during the startup conference Slush.
“We are thrilled to have Manny (Fernandez) on-board as an investor and are looking forward to the relationship with DreamFunded”, stated Invesdor co-founder and CEO Lasse Mäkelä.
DreamFunded is an equity crowdfunding platform founded by Fernandez who was recognized as the San Francisco Angel Investor of the year in 2014. Fernandez is also founder and President of SF Angels Group, an invite-only, 32-angel investor group based in San Francisco.
“The crowdfunding market is growing rapidly on a global level. We are creating a strong funding structure by building a bridge between Europe and Silicon Valley,” commented Fernandez.
Invesdor and DreamFunded.com are said to be creating an alliance designed to bring investors and capital from Silicon Valley and Europe closer together. The goal of the alliance will be to provide both European and American investors access to high growth companies in both Europe and America. Fernandez will also act as an advisor to Invesdor.
“Title III of the JOBS act, which was recently approved by the SEC, opens doors for US-based investors to invest in private growth companies,” explained Mäkelä. “The relationship between us and DreamFunded will capitalize on this and result in many cross-promotion possibilities, which will ultimately benefit investors and growth companies on both continents.”
For many entrepreneurs, finding an investor for their company can be crucial in their path to success. Still, for many, the question remains: how do entrepreneurs find investors and connect with them? While we've covered topics such as How To Secure Lead Investor and What is an Angel Investor?, in this article we receive personal insight from an entrepreneur turned investor.
Manny Fernandez, CEO and Co-founder of DreamFunded.com, gives guidance from both an entrepreneur and investor's point of view as he tells us about his transition from startups, investments, and finally to creating a platform built specifically for entrepreneurs and investors alike.
"Luck plays a large part in any success but it is still largely in one’s control. Things that can improve your chances of getting lucky are: hard work, staying positive, being a great student, having the right mentors, and surrounding yourself with the right people or team to help. " -
When you were little, what was your dream job?
"I wanted to be like Warren Buffet in my early days. I wanted to be an entrepreneur who was able to invest in businesses and make my investors lots of money."
Is this how you got into angel investing?
"Originally, I wanted to diversify from my real estate holdings by investing into tech companies. A couple of courses at Stanford University taught me the basics. I was lucky enough to have a mentor who taught me how to screen opportunities and become visible to attract better opportunities. I began with what I knew at the time and invested in some successful fin-tech startups in the real estate space, and later I joined TiE Angels. I formed SF Angels Group in San Francisco because I saw the need for a formalized angel network in the San Francisco area."
What is a significant lesson you've learned during the transition from entrepreneur to angel investor?
"The language and thought processes are different. I think that entrepreneurs should talk more about how investors are going to make money and work on properly articulating that. Entrepreneurs speak about their business and passion, and investors are thinking about how they are going to make money investing in the business. I can now see how investors look at an entrepreneur, whereas before I was not able to understand the mindset of investors as intuitively."
Understanding the disconnect between investors and entrepreneurs, Fernandez aimed to help solve the problem. In 2014, he cofounded DreamFunded.com, an online angel capital platform that provides angel investors pre-screened deals to promising startups. On the other hand, startups are able to apply to DreamFunded in order to easily connect and find funding through the available network. Fernandez states:
I wanted to help more promising entrepreneurs get funding quicker, while at the same time help investors access talented investment opportunities. I hope that someday, we will be able to allow everyone, accredited or not to invest in startups."
As an investor, what is one specific quality that you look for when investing in a company?
"A great team, being early into the market and entering a huge market. All in that order."
Do you recommend any good books for entrepreneurs to read?
"The book that I am currently writing 'The New & Improved Way of Investing in Startups'! All jokes aside, 'Think and Grow Rich' by Napoleon Hill is a great book! I would highly recommend it to others who are looking to become successful."
Will Announce New Steps to Promote Access to Capital for Entrepreneurs and Protections for Investors
April 05, 2012, WASHINGTON, DC – Today President Obama will sign the Jumpstart Our Business Startups (JOBS) Act, a bipartisan bill that enacts many of the President’s proposals to encourage startups and support our nation’s small businesses.
The President believes that our small businesses and startups are driving the recovery and job creation. That’s why he put forward a number of specific ways to encourage small business and startup investment in the American Jobs Act last fall, and worked with members on both sides of the aisle to sign these common-sense measures into law today. The JOBS Act will allow Main Street small businesses and high-growth enterprises to raise capital from investors more efficiently, allowing small and young firms across the country to grow and hire faster.
“America’s high-growth entrepreneurs and small businesses play a vital role in creating jobs and growing the economy,” said President Obama. “I’m pleased Congress took bipartisan action to pass this bill. These proposals will help entrepreneurs raise the capital they need to put Americans back to work and create an economy that’s built to last.”
Throughout this effort, the President has maintained a strong focus on ensuring that we expand access to capital for young firms in a way that is consistent with sound investor protections. To that end, the President today will call on the Treasury, Small Business Administration and Department of Justice to closely monitor this legislation and report regularly to him with its findings. In addition, major crowfunding organizations sent a letter to the President today committing to core investor protections, including a new code of conduct for crowdfunding platforms.
In March of last year, the President directed his Administration to host a conference titled “Access to Capital: Fostering Growth and Innovation for Small Companies.” The conference brought together policymakers and key stakeholders whose ideas directly led to many of the proposals contained in the JOBS Act. A primary takeaway from the conference was that capital from public and private investors helps entrepreneurs achieve their dreams and turn ideas into startups that create jobs and fuel sustainable economic growth.
Key Elements of the JOBS Act
The JOBS Act includes all three of the capital formation priorities that the President first raised in his September 2011 address to a Joint Session of Congress, and outlined in more detail in his Startup America Legislative Agenda to Congress in January 2012: allowing “crowdfunding,” expanding “mini-public offerings,” and creating an “IPO on-ramp” consistent with investor protections.
The JOBS Act is a product of bipartisan cooperation, with the President and Congress working together to promote American entrepreneurship and innovation while maintaining important protections for American investors. It will help growing businesses access financing while maintaining investor protections, in several ways:
• Allowing Small Businesses to Harness “Crowdfunding”: The Internet already has been a tool for fundraising from many thousands of donors. Subject to rulemaking by the U.S. Securities and Exchange Commission (SEC), startups and small businesses will be allowed to raise up to $1 million annually from many small-dollar investors through web-based platforms, democratizing access to capital. Because the Senate acted on a bipartisan amendment, the bill includes key investor protections the President called for, including a requirement that all crowdfunding must occur through platforms that are registered with a self-regulatory organization and regulated by the SEC. In addition, investors’ annual combined investments in crowdfunded securities will be limited based on an income and net worth test.
• Expanding “Mini Public Offerings”: Prior to this legislation, the existing “Regulation A” exemption from certain SEC requirements for small businesses seeking to raise less than $5 million in a public offering was seldom used. The JOBS Act will raise this threshold to $50 million, streamlining the process for smaller innovative companies to raise capital consistent with investor protections.
• Creating an “IPO On-Ramp”: The JOBS Act makes it easier for young, high-growth firms to go public by providing an incubator period for a new class of “Emerging Growth Companies.” During this period, qualifying companies will have time to reach compliance with certain public company disclosure and auditing requirements after their initial public offering (IPO). Any firm that goes public already has up to two years after its IPO to comply with certain Sarbanes-Oxley auditing requirements. The JOBS Act extends that period to a maximum of five years, or less if during the on-ramp period a company achieves $1 billion in gross revenue, $700 million in public float, or issues more than $1 billion in non-convertible debt in the previous three years.
Additionally, the JOBS Act changes some existing limitations on how companies can solicit private investments from “accredited investors,” tasks the SEC with ensuring that companies take reasonable steps to verify that such investors are accredited, and gives companies more flexibility to plan their access to public markets and incentivize employees.
Additional Initiatives Announced Today to Promote Capital Access and Investor Protection
• Monitoring of JOBS Act Implementation: The President is directing the Treasury Department, Small Business Administration and Department of Justice to closely monitor the implementation of this legislation to ensure that it is achieving its goals of enhancing access capital while maintaining appropriate investor protections. These agencies, consulting closely with the SEC and key non-governmental stakeholders, will report their findings to the President on a biannual basis, and will include recommendations for additional necessary steps to ensure that the legislation achieves its goals.