How Does 506er Work?


Welcome new 506er!

Before we explain HOW...let’s explain WHAT and WHY. 

What were you doing in 2012 when this happened?

The Jumpstart Our Business Startups Act, or JOBS Act, is a law intended to encourage funding of small businesses in the United States by easing many of the country's securities regulations. It passed with bipartisan support, and was signed into law by President Barack Obama on April 5, 2012.

Since this went into effect, companies have been flocking to the now 40+ regulated funding portals, and enjoying the benefits of crowdfunding for equity.

But, for the creators of 506er.com, the crowdfunding wasn’t the most exciting part about the JOBS Act. 

We were jumping for joy at the restrictions lifted from general solicitation..!

Rule 506(c) of Regulation D. Section 201(a) of the JOBS Act requires the SEC to eliminate the prohibition on using general solicitation under Rule 506 where all purchasers of the securities are accredited investors and the issuer takes reasonable steps to verify that the purchasers are accredited investors.

Rule 506(b) of Regulation D is considered a “safe harbor” under Section 4(a)(2). It provides objective standards that a company can rely on to meet the requirements of the Section 4(a)(2) exemption. Companies conducting an offering under Rule 506(b) can raise an unlimited amount of money and can sell securities to an unlimited number of accredited investors.

In plain terms, 506(c) means you can ask people whom you don’t know, that make a certain amount of money, (accredited investors), to invest in your company by using the internet, or any type of advertising you want. Before then, you couldn’t do it or you would be breaking the law. 

Rule 506(b) means that you can ask a small amount of people, (up to 35), that can make any amount of money, and that you’ve known for at least 30 days to invest in your company.
(You will have to be able to prove it. That’s where we can help. More on that later)

Regulation crowdfunding is handled by the funding portals and allows you to raise from ANYONE that comes to that website and meets the minimum purchase requirement for your shares.
(Cool right? Yeah, we love it too)

Of course, all of the above is just for information purposes and can be further outlined here on the Securities and Exchange Commission website. Speak to a lawyer for more information as well. 

Funding Portals Work For Some

The funding portals still depend on companies going to friends, family and customers, before and during their raise. 

This is all fine, but suppose the entrepreneur or company has exhausted all of those resources and needs to reach the general public?

Suppose the company is prerevenue or hasn't even launched yet? Who do they go to for funding? 

(We focus on equity raising on 506er.com, but will talk about the rewards crowdfunding portals in the message boards)

Press Releases? Social Media? Maybe. 

Press releases go to the press or bloggers and most of them won’t publish stories about your raise. Social media site promotion may work, but can be extremely expensive.

Even if someone accidentally stumbles onto your campaign page, no one will contribute to a dead offering. (Trust me, we know)

You need all the help you can get, for as little money as possible.

We can help you at 506er.com in all stages of your equity raise. 

1. FREE or PREMIUM pitch sessions available.The free pitch session will be daily starting August 26, 2019 as a host will announce some of the latest crowdfunding and Regulation 506(c) offerings in an online meeting room. This will be a chance to have your offering announced to people other than friends, family and customers! The free pitch will drive them to your funding portal or even your website, phone or email.

PREMIUM pitch sessions are $99.00 and are for crowdfunding, Regulation 506(b) and 506(c) offerings.

They are full presentations in which a representative of the company will be able to address the investors with pitch decks, slide shows, video and other forms of advertisement.

A member of the 506er staff will moderate, and help the representative answer general questions and share documents. Premium presentations are for 15 minutes and can be followed up with up to 30 minutes of questions and answer afterwards. The premium pitch sessions can be scheduled up to 4 weeks in advance.

2. A RED BAR ANNOUNCEMENT can also be purchased to be shown on the front of the 506er.com website for 7 days for $199.00. (Discounted rates if purchased for us to 4 weeks) Added features is that this bar announcement includes a link to the crowdfunding portal or website for the potential investor AND an announcement in the free pitch room every day during throughout the advertisement.   

FREE
$

0.00

    Message Board 
    1 Pitch Announcement
    (Will be grouped with other pitches. About 5 - 10 minutes from 506er host)




PREMIUM 
$

99.00

    Message Board
    1 Pitch Announcement
    Full Presentation Room
    (Up to 200 Attendance)
    Full 15 minute presentation + up to 30 minute Q&A
    Room Moderator
    Video Advertisement
    Social media promotion 
RED BAR AD
$

199.00

    Red bar ad that follows site visitor on homepage for 7 days. Exclusive run of site advertising border. Can link directly to website or crowdfunding campaign.  Up to 4 weeks
    (same wording) at discounted rate per week.

Partner Sessions 

Get to know your potential future business partners and investors in special sessions. This is a great way to socialize and prepare for pitch sessions. No personal information can be given or pitches made in the partner sessions except for first names and company names.