San Francisco Startup? Crowdsourcing and the Need for a CPA Audit

Filed in CPA Blog by on February 7, 2017
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San Francisco is home to many, many startups. Some are as small as a couple of friends starting the next taco bar, others are venture-backed startups, and many others are in the middle. Often, people turn to friends and family for capital, and some very brave souls “charge” their startup expenses on their credit cards (not necessarily recommended!). Congress over the last few years has been trying to spur entrepreneurship and small business in the United States through what is known  as the Jumpstart Our Business Startups or JOBS act.  Well, we’ leave you to Google the JOBS act for all the gory details, but let us call your attention to TITLE III. According to a very good article on the Intuit blog:

The SEC approved Title III on October 30, 2015, allowing companies to raise $1 million over a 12-month period. Nonetheless, Title III rules will not become effective until 180 days after approval, which is April 30, 2016. Once they come into effect, a company can raise money from anyone, including those earning less than $100,000 per year.

These individuals can invest $2,000 or 5% of their annual income in a 12-month period. People with greater earnings can invest 10% of their annual income. No individual investor will be able to purchase more than $100,000 worth of securities through this option. “Title III is so exciting because it opens a gateway to investors of all income levels for entrepreneurs seeking capital,” says Wales.

Title III will require companies to disclose certain information about their offerings, including:

San Francisco Start Up Accountant

Photo credit: TheNickster via Foter.com / CC BY-SA

Startups are the companies most likely to benefit from Title III.  Source is here.

Startups Need CPA Firm

The take-away here is that if you are a Startup and you are turning to crowdsourcing on sites like CrowdFunder, then you need a CPA firm to render information on your valuatoin and financials. This is very important as obviously you don’t want to mislead any investors, and you want to make efforts against any potential lawsuits down the road by doing the required due diligence. Guess what? Our firm can help your San Francisco Bay Area startup with the sorts of audited financials and other details you’ll need to pursue this VERY exciting new form of corporate finance. Reach out to us for help!

 

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