Frequently Asked Questions
How can we help?
FAQS
FOR ISSUERS
How are you different from kickstarter?
      On Kickstarter, companies raise money by posting products before development. Customers pay for the product in advance so the business has the capital to create the product. This setup is ideal for some companies, but other companies are unable to profit from the arrangement. Many companies need other options.
           Token Interest operates under Regulation Crowdfunding, a law permitting companies to obtain a small business loan from the community. Companies can get loans for property, equipment, or other business activity. This type of funding is currently unavailable through Kickstarter.
Why crowdfunding?
           Crowdfunding is a unique opportunity to utilize your community for financial aid for your business. Investor will be more loyal customers and more compelled to help. You can leverage these relationships to help your business succeed. They can watch a YouTube video, send referrals, or other helpful activities. Your company will gain the assistance of many people who want your business to succeed.
      Common business advice is to fail fast and cheap. With Crowdfunding, you can test your idea on the market. If the market supports the idea, the more likely it is to succeed.  When people are willing to put their own money on the line, it shows the level of belief they have in the idea. If the idea does not raise money, then it fails fast and cheap and you can move onto the next great idea.
      Issuers can help set the terms of the small business loans offered. Business can help determine the interest rate, the payment schedule, and other terms of the loan. This flexibility will help your idea to succeed when other loans are too restrictive.
What is the maximum/minimum I can raise?
           The minimum amount that can be raised through Token Interest is $10,000. We recommend setting this as your minimum funding limit so that if your venture isn’t as prosperous as you would hope, you can still gain capital from the experience. Additionally, studies show that investors are more willing to invest in a company that has already hit its goal. The maximum amount a firm can raise in a 12 month period is 5 million. If the firm wishes to raise more, they must wait 12 month before completing additional crowdfunding rounds.
What are the financial disclosure requirements?
The financial disclosure requirements vary for different levels of capital raised. The more a firm raises, the more disclosure and review is required. Below are different levels of capital you can raise with the associated disclosure requirement.
$124,000 or less: If outstanding capital raised through crowdfunding plus current capital raised is less than or equal to $124,000, then information from the most recent tax return should be posted. This information must be certified by the principal executive officer. In the event that the company has financial statements available, they must be posted in lieu of tax return information.
Between $124,000.01 to $618,000: If outstanding capital raised through crowdfunding plus current capital raised is between $124,000 and $618,000, the company must provide financial statements reviewed by a CPA. If audited financial statements are available, they must be provided.
Between $618,000.01 to $5 million: If net capital raised is above $618,000, audited financial statements must be provided. If this is the company’s first time funding capital through Regulation Crowdfunding, audited financial statements are only required if the company is raising $1,235,000 or more.
           These financial statements are posted to the SEC’s website in addition to the funding portal’s website and are available for review by investors during the funding period.
What are the cons of crowdfunding?
           The most prominent con of crowdfunding is the requirement to make your financial statement public. This means anyone can view the company’s financial statements through the SEC’s website. If you company is unwilling to post financial statement then a different method of obtaining capital would be better suited for the company.
           Companies are required to file Form C-AR with the SEC annually. It is similar to Form C filed at the begin of the campaign and includes basic information about the company and the financial statements. If a company has less than 300 holders of record, then the Form C will only need to be filed once. If the company’s net worth is less than $10,000,000, they are only required to file a Form C for three years.
What is a Form C?
Form C is paperwork companies need to submit to the SEC in order to raise using Regulation Crowdfunding. The paper work has similarities to most funding applications. Click here to learn more.
Is my company a good fit for crowdfunding?
           Any type of company can succeed at crowdfunding. Companies from every industry have had highly successful raises. Crowdfunding is most successful when the company is backed by a community of people. Companies will have a difficult time succeeding if they do not recruit their own investors.
           There are a few types of companies that cannot raise money under Regulation Crowdfunding. A non-U.S. company and companies not abiding by federal law cannot use Regulation Crowdfunding to raise capital in the United States.  All companies raising funds must be based in the United States.Â
How do I begin to campaign?
Beginning your campaign may seem like an overwhelming task, we want you to be as successful as possible so we will assign a specialist to assist you throughout the raise. Click here to view the campaign guide which will walk you through necessary step to take to begin your campaign. Feel free to contact us at support@tokeninterest.finance with any questions you may have.
Can I use my own loan contract?
           Token Interest uses smart contracts to make the process cheaper and more efficient for our issuers and purchasers. Unfortunately, contracts written by lawyers do not easily translate into smart contract code. Therefore all companies raising on this platform are limited to the smart contract written by Token Interest. Fortunately, these contracts are highly customizable. It can accommodate most loan structures. You can contact us directly to see if it can accommodate the loan you desire at support@tokeninterest.finance.
How does Token Interest select investments?
           Token Interest strives to keep our investors as safe as possible. Therefore, we have rules for companies raising capital on our site. We will eliminate ventures that have a high possibility of fraud. Different factors analyzed by Token Interest include: experience, working capital, tangible net worth, ect. Companies are scrutinized before being placed on our website.
How long will I need to campaign?
Legally, a campaign must be posted for 21 days. We recommend posting campaigns for 2-3 months. It is a sweet spot that will motivate people to send funds quickly but leaves enough time to market to the community.