Take Note of the Republic of Title III: Compliant Crowdfunding Beyond Crypto
Another victory notched up by the JOBS Act.
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Republic is an investment platform that enables anyone to invest in startups: accredited or otherwise. The company has today announced the expansion of its Note reward token program. Five companies have already raised equity to the tune of $1 million each.
The SEC-registered, FINRA-licensed Republic platform is a member of the startup platform ecosystem that includes AngelList and Product Hunt. Republic launched its equity investment platform in 2016. It has also introduced Radar, a Republic syndicate on AngelList that connects founders with traditional venture firms.
About a year ago, it created Republic Crypto, the first “full stack Fundraising solution in the crypto space.” It now also boasts an investment advisory service, Republic Labs.
With a mission to democratize startup fundraising and investing, the platform allows non-accredited, mom-and-pop investors the opportunity to become angel investors and venture capitalists for as little as $10. Republic allows the average American to get in on the startup scene, investing alongside seasoned investors like Tim Draper.
Barack Obama’s JOBS Act Makes Crowdfunded Private Equity Possible
The U.S. Securities and Exchange Commission enacted Title III of the JOBS Act in May of 2016, opening the door for average-income Americans to invest in startups, provided they had the means to absorb the possible losses. The JOBS Act, signed into law by America’s last bona fide president, Barack Obama, in 2012 was intended to stimulate the economy by helping small businesses get access to capital they’d previously not enjoyed access to.
Equity crowdfunding was born. Title III opened the doors not only to everyday Americans who saw a company they believed in and wanted to be part of its success but also helped usher in a new wave of entrepreneurs. Female, black, and Latinx founders were grossly underrepresented in Silicon Valley, where most of the VC activity took place. Venture capital was white male terrain.
That commitment to minorities is something Republic is proud of:
“…talent is evenly distributed, but opportunity is not. Equalization of the fundraising landscape will provide more talent with the chance to build companies and create more investment opportunities for investors. Traditionally, female, black, and latinx founders have seen far less venture capital than their white male counterparts. Furthermore, the majority of funded startups come from Silicon Valley and New York with little representation from other cities across the US.”
– Republic website
Take Note: Equity Crowdfunding is Here to Stay
In April 2019, Republic launched the digital token Note rewards program. The program rewards users for supporting the global startup ecosystem. The program offers users a number of ways to earn Notes and use them for rewards on and off the Republic platform.
Since the launch of Notes rewards, millions of Republic Notes have been distributed, thousands of new users have been acquired, and more than 300,000 users have participated. The platform has seen five startups successfully raise $1 million on the platform.
CHRGR is a mobile phone charger that allows advertisers to place branding on the devices. InnaMed is at-home blood testing tech to enable personalized medicine. SimpleShowing is a mobile app that allows homebuyers to search, tour, and buy a home.
It raised over 4,000 percent of its target minimum within days.
The Notes program also allows Notes holders to earn credits they can spend on investments, attend exclusive events, and even earn a seat on the Republic Advisory Board. The more Notes you earn, the more benefits you accrue, making it an ingenious way of incentivizing democratized startup financing.
Republic plans for Notes holders to also eventually benefit from the success of the Republic platform itself. On the Notes program, Shrina Kurani, Vice President of Business and Head of Tokenization at Republic said:
“This is an important milestone in Republic’s history. It marks the first time that a company, outside of those involved in crypto/blockchain technology, has raised a million dollars on our platform and it’s not even one company – it’s five, all within a few months of our digital token Note launch. This reinforces that startups can successfully raise money from the crowd, and we’re pleased to roll out even more rewards as part of our program to encourage more investors and partners to join the startup ecosystem.”
– Shrina Kurani, Vice President of Business and Head of Tokenization at Republic
The Notes initiative is currently being tested under Regulation A of the Securities Act of 1933, and, as yet, offers no guarantees or creates any commitments on Republic’s behalf. As the company awaits the green light from the SEC, securities in the crowdfunding platform are not being sold until qualified by the regulator.
Republic is one company using laws created under the JOBS Act and proposing to use tokenization in a positive, meaningful way. As the company itself asked, “If Americans directed a portion of the staggering $119 billion in annual gambling losses toward funding entrepreneurship and innovation, what change — and economic value — might be achieved?”