COLORADO COMMUNITY CAPITAL PBC

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  • 07 Nov 2016 9:19 AM | Anonymous

    As progress continues at the federal and state level to roll back regulations restricting small businesses from raising capital, the embracement and support of investment crowdfunding has met with reactions that may seem curious or confounding to both small businesses and potential non-accredited financial supporters.   The industry that matches capital seekers with investors has its own culture: a variety of traditions, customers, expectations and dialects that has arisen over the history of humankind.

    One of the key cultural distinctions within the capital industry is whether an investment offering is viewed as an opportunity to share the rewards of a particular venture or whether it is viewed as a just another building material.

    In the first perspective, an entrepreneur is seeking capital to advance an idea, produce a new product or service or to grow the business in which the opportunity has been structured.  There is a clear risk in making this capital available and there may be a reward if the venture should prove successful.  In structuring the offering, the entrepreneur is balancing the value of the different contributions of resources to the business over time when the risks of the venture are completely different.  The intent is to pay back the investor their investment with a return that is appropriate. 

    Reasonable people can and will disagree over what is an appropriate allocation of success.  Less reasonable people will attribute all of the success to themselves and may treat investors as ‘lucky’ to be extended the privilege of putting their money at risk with such a cool entrepreneur.  Still others may want to keep all of the money and may even use it inappropriately for their personal benefit.  This is one of the reasons that the character and integrity of the management team remains the single most important factor in making an investment.

    Crowdfunding presents new ways to allocate success to new investors – individuals without wealth who are classified as non-accredited.  In addition, crowdfunding presents an opportunity to provide non-monetary rewards to investors: status, privileges, benefits, shared values and achievement of common goals.

    In the perspective of a person who treats capital as a type of building material, crowdfunding will often be rejected.  An entrepreneur who is seeking to build a business to flip it by selling to someone else, will look at the price and time to conduct a crowdfunding campaign as more expensive than a simple loan or single large dollar investment.  Any additional price paid for capital or any additional time expended in raising the capital is viewed as a direct impact on the total cost and the projected profit of the project.

    There has been significant discussion of crowdfunding as giving the average person an opportunity to invest in projects with high rates of return – just like wealthy people do.  However, there is no incentive to an entrepreneur to engage in crowdfunding when he or she has other options for money and money is treated solely as a cost of doing business.  So, opportunities for the average person to ‘get rich’ through investment crowdfunding will be limited.

    High risk opportunities will frequently be presented within crowdfunding where entrepreneurs have been unable to obtain money from other sources.  Some of these opportunities may also have the potential for high rewards and some of them are will just be bad opportunities.

    The general rule of raising capital is to acquire money as quickly as possible at the lowest price with the least effort.  Investment crowdfunding will commonly not win this foot race with other sources of capital.  Increasing the price of money, the time to raise money or the complexity of raising money will result in greater risk of failure.

    The general rule of raising capital should be re-examined where the conduct of a capital campaign serves to increase sales.  The greater good of the venture can be achieved by raising money from existing and future customers leading to more sales.  In this situation, spending the money and taking the time to engage in investment crowdfunding may be justified.

    This topic and related issues on community capital and investment crowdfunding will be the subject of workshops presented by Colorado Community Capital PBC at Colorado Lending Source on November 17 and December 15.  http://www.coloradocommunitycapital.com/events.   In addition, the first ComCap Colorado conference on raising money for Main Street organizations will be held on February 1, 2017.  http://www.comcap.us/colorado.


  • 30 Oct 2016 3:12 PM | Anonymous

    A study just released by the Kaufmann Foundation entitled CHANGING CAPITAL: Emerging Trends in Entrepreneurial Finance reveals data on five shifts on who, where and how entrepreneurs find money.

    http://www.kauffman.org/~/media/kauffman_org/research%20reports%20and%20covers/2016/emerging_trends_in_entrepreneurial_finance.pdf

    The Kaufmann Foundation is, in my opinion, the leading foundation in the world dedicated to entrepreneurs.  The Foundation has previously published some of the most detailed analysis of where entrepreneurs raise money and one of a few to recognize the negative impact on entrepreneurs of the Dodd-Frank legislation.  This report, relying too heavily on easily accessible information, is top heavy on information on venture capital and angel investing.

    The first trend is that venture capitalists are establishing more mega funds and small funds.  The smaller funds are making individual investments of small dollars.  Although using the same business model, the significant differences between the high and low end of this spectrum suggests that maybe a new class of funds is evolving.  It is not clear whether these funds are new players in this segment of the capital industry or if this is a change in strategic focus for some existing players.  In the past, increases in first round and small dollar raises has been an indication of too much money and not enough deals – forcing venture capitalists to look outside of their normal comfort zone.

    The second trend is the growing use of online platforms – investment crowdfunding.  As has been discussed in other articles, nearly all of the early stage growth in investment crowdfunding has been by accredited investors with a very high percentage of deals in real estate.  I expect this trend to accelerate with a quickly growing segment – an ultimately the largest segment – will be comprised of businesses offering consumer products and services receiving investments from non-accredited investors.  This growth may become even faster as secondary markets / local exchanges are established.

    The third trend is the growing number of deals that are occurring outside of the ‘usual’ places.  Several possible causes for this trend are identified.  Again, established venture capitalists may be looking outside of their backyards for deals that have less competition for money.   Product crowdfunding, specifically Kickstarter, is mentioned.  This type of crowdfunding is not so much a shift away from institutional money, but a completely different source of money – the average person.   With all of the new options for investment crowdfunding, the next study should examine whether people are pulling money out of their retirement funds and directing them to Main Street businesses.

    The fourth trend is the continuing expansion in women led businesses and their growing success in obtaining capital.  Historically, women have experienced parallels in raising money to obtaining comparative salaries – lower dollar amounts and taking more time to raise money.  Some of this trend may be the number of new programs, projects and funds that are dedicated to women.  Most of these new sources of capital are comprised of and managed by women.  Venture capital and angel investing is less and less a ‘man’s game’.

    The fifth and most important is experimentation in new capital models.  ‘Fintech’ also known as ‘financial technology’ has become a buzzword.  Block chain technology threatens to disrupt payment processing while improving privacy and reducing cybercrime.  Investment crowdfunding, a segment of the capital industry that is growing all by itself, is mutating into all kinds of new capital hybrids.  Investment crowdfunding is blending with product crowdfunding – creating a potential for customers to become the largest source of funding for small business.  Crowdfunding is now coming in flavors of factoring, inventory financing, financing of funding, and peer to peer lending.  Combinations of capital – capital stacks – show great promise to follow a business from startup to profitability.

    All of these changes in the capital industry will give businesses, particularly startups and small businesses, a much larger selection of funding option.  It is not expected that these changes will replace any of the current players, but simply extend the industry in different directions.

    This topic, with a focus on 'community capital', will be the subject of the upcoming ComCap Colorado conference on February 1, 2017.  http://www.comcap.us/colorado.

    Investment crowdfunding using a consumer/customer approach will be presented by Colorado Community Capital PBC at Colorado Lending Source on upcoming workshops on November 17 and December 15, 2016. http://www.coloradocommunitycapital.com/events


  • 24 Oct 2016 7:03 AM | Anonymous

    Crowdfunding requires a ‘crowd’ to obtain ‘funding’.  Recognition of this market truth raises the question of “How do I build a crowd?”  Crowd building can take several forms and different approaches.  One of these is creating a crowd of ‘fans’.  Taken from the word ‘fanatic’, a ‘fan’ is a person who follows your work, holds you in a special form of adoration or respect and commonly likes to describe himself or herself as having an affiliation with you.  We have all seen sports fanning wearing the apparel of their favor team.

    So, how does this work for a business, social enterprise or community project?  I have adapted some ideas from my book ‘Everyone’s an Expert’ that I co-authored to address the need for people to distinguish themselves in today’s world of too much information.  With the Internet and the seemingly infinite amount of social media with posts and videos about almost anything, if you do nothing you can hide in plain sight.

    For an individual, I recommended attaining the status of an expert.  I recognized that people who authored a book, spoke in from a room and who taught a class were accorded higher status.  So, I recommended that you write (books, blogs or letters to the editor), that you tell your story in front of different audiences (civic, professional or business organizations) and that you teach others what you know (webinars, workshops or classes at educational institutions).

    All of these things have to be done in public where they can be seen and heard.  I have stacks of hard drives with studies and projects that I worked on that nobody knows exists.  Therefore, people cannot care, be interested and become a fan of mine on this work.  This often happens with social media if you have no one visiting your website or who are not members of your online group.  A story has to be told at an ‘Internet’ crossroads like a billboard on the highway where everyone can see it.

    Creating a fan requires engagement.  You have to ask their opinion (and listen to it and possibly act on it by making a change in your product or service).  You have to create opportunities where they can demonstrate their loyalty and you recognize that loyalty.  Holding a sale just for VIP customers is one form of this action.

    Creating a fan requires quality.  Fans want to look good.  They will not tell their friends and family and associates within their network about you if you make them look bad.  Fans are a reflection of you.

    Fans want appreciation.  They want opportunities to ‘belong’ to a group.  This may a special card, an invitation to a special event or just a word of thanks.  Fans are looking for something that sets them apart just as you and your organization want to be viewed as something special.

    Fans want to participate.  They are looking for some activity that goes beyond the shopping experience.  This may take the form of a concert, an introduction to a celebrity or joining forces to support a local charity.

    All of these recommendations act to elevate your fans ‘above the crowd’ where they enjoy a sense of pride and camaraderie that is associated with your organization.

    All of these recommendations require work.  Loyalty does not come cheap.  It is necessary to interact with and react to your customers, suppliers, resellers and others who know of and benefit from the success of your organization.  This work is time consuming and can become overwhelming.  Techniques, methods, and systems are needed to impact all of your fans with a single action.  You must be efficient.

    You must be visible.  You must use your own channels of communication and any available social media to tell your story and your interaction with your fans where everyone can see it.  Brag on your fans in public.  Give them the tools to retell your story and their role in it.  The best way to build a crowd is to borrow everyone else’s.  Fans will not only lend you their crowd, but drive you to their crowd in their own car if you give them the opportunity.

    This topic and related topics on investment crowdfunding will be presented by Colorado Community Capital PBC on Thursday, October 27 or November 17 or December 15 at workshops on Customer Crowdfunding at the Colorado Lending Source.  For more information or to register, go to http://www.coloradocapitalcongress.com/events.

    In addition, you can register now for ComCap Colorado – a statewide conference on community capital and forming capital communities to address access to capital for Main Street organizations that will be held on February 1, 2017.  Go to: http://www.comcap.us/colorado.


  • 17 Oct 2016 8:32 AM | Anonymous

    Community capital will be the focus of a statewide conference, ComCap Colorado, which will be held on February 1, 2017.  http://www.comcap.us/colorado

    You are invited!  Please download an invitation and share it with everyone in your network.

    The National Coalition defines ‘Community Capital’ for Community Capital (NC3) as “capital that remains in the community, comes from the community, and benefits the community - ultimately strengthening community.” NC3 is working to move a significant portion of the estimated $40+ trillion Americans have in long-term savings from Wall Street to local and social entrepreneurs”http://nc3.comcap.us/ 

    Community capital may be considered ‘alternative capital’ – money from a source different from common sources such as banks or angels.  Community capital may also be viewed as any capital that can be obtained from a source within a short distance from your current base of operations: equity, debt, revenue share, asset sharing, licensing, sale of assets, grants, gifts, deferred compensation, earnings, factoring, leasing and lines of credit.

    The goal of ComCap Colorado is to foster new and support existing ‘Capital Communities - a group or crowd that acts in concert to support capitalization of one or more businesses, social enterprises or community projects. A Capital Community acts like a volunteer fire brigade that comes together as needed, when needed, to support the capital campaign of an organization within their community.  A Capital Community may be framed as a geographical area, an industry, a social cause or other topic in which the members of the Capital Community have common interests.  A Capital Community may be established at different levels: informal groups, a program within an organization, an investment club, an impact fund or an investment fund.

     Attendees of ComCap Colorado will meet Colorado leaders within the capital industry, will learn about and be introduced to a wide variety of local capital sources, learn about, obtain tools and receive support to start Capital Communities.

    With the recent rollback in securities regulations at the state and federal level, everyone is now enabled to invest in and provide financial support to a Main Street organization.  The United States passed the JOBS Act in 2012 and the State of Colorado passed the Colorado Crowdfunding Act 2015.  These changes enable public promotion of a capital campaign and the unlimited participation by non-accredited investors that comprise 97% of the population.

    ComCap Colorado is a collaboration of Colorado Community Capital PBC (formerly Colorado Capital Congress) http://www.coloradocapitalcommunity.com, the Jake Jabs Center for Entrepreneurship at the University of Colorado http://www.ucdenver.edu/academics/colleges/business/industry-programs/entrepreneurship/Pages/default.aspx and Hatch Innovation http://hatchthefuture.org/.  ComCap Colorado will be held at the Colorado University South Campus at 10035 Peoria Street, Parker, Colorado 80134.

    This topic and related topics on investment crowdfunding will be presented by Colorado Community Capital PBC on Thursday, October 27 at a workshop on Customer Crowdfunding at the Colorado Lending Source.  For more information or to register, go to http://www.coloradocapitalcongress.com/events.

    Karl Dakin

    Dakin Capital Services LLC

    kdakin@dakincapitalservices.com


  • 03 Oct 2016 8:55 AM | Anonymous

    Access to capital remains one of the greatest challenges to small businesses, social enterprises and community projects.  Raising capital is a difficult activity. It can become an impossible activity if the organization does not have enough capital to conduct a capital campaign. 

    So, the question is presented:  If an organization does not have the resources to raise money, is it possible to raise money to raise money?  Whenever an entrepreneur encounters an insurmountable obstacle, it is necessary to take one step back and adopt a strategy specifically to address that obstacle. 

    The simple answer to the question is ‘Yes’.  However, the entrepreneur must conduct two campaigns instead of one.  Each campaign will be different in terms of size, target and story.

    Say for example, an organization seeks to raise $500,000.  This capital campaign may be targeting wealthy individuals (angels), average people (non-accredited investors), strategic partners or other stakeholders.  The type of capital may be equity, debt or revenue share.  However, the organization has completed a campaign plan and has determined that it will require about $30,000 in order to conduct the campaign with a high probability of success (over and above time committed by the organization).  $30,000 that it does not have.

    It will be necessary to first conduct a capital campaign to raise the $30,000.  Although this campaign may target some or all of the same people of the original $500,000 campaign, it will be limited to quick money: capital from people already known to the organization who have a strong interest in its success.  The $30,000 campaign will not simply be a smaller version of the $500,000 campaign.

    The investment deal will most likely be structured as a bridge loan – a debt of short duration – just long enough to complete the capital campaign.  The loan may be paid back out of the money raised in the $500,000 campaign.  As an additional incentive, the supporters of the $30,000 campaign may be offered an opportunity to roll over their investment into the $500,000 campaign at preferential (discounted) pricing.

    Because of the short duration, the investment in the $30,000 campaign may be perceived as having a lower risk than the $500,000.  This may actually be false in that a failure to raise the $30,000 may bring the organization to a halt or actually force it to shut down.  The $30,000 campaign may be accurately portrayed as an ‘all or nothing’ gamble. Because of the dependency upon successfully completing the $500,000 campaign, an organization may have to make the same quality investor pitch for the $30,000 campaign as the $500,000 campaign. The organization may find itself in a situation where ‘you can’t get there from here’ with no options on raising the $30,000.

    The smaller dollar size of the $30,000 campaign may make the loss affordable (the investor is able to withstand the negative impact of a loss of the investment) to certain supporters.  The affordability of the loss may be increased by spreading it out over a group of investors – a capital community – with no one person bearing the brunt of the entire risk.

    The smaller dollar size of the $30,000 campaign may enable more people to participate in providing support – people who may provide $100 of support each in the $30,000 campaign that could not provide financial support of $500 or $1000 that might be sought as a minimum investment in the $500,000 campaign. 

    The smaller dollar size may also enable the organization to qualify for local community and economic development support.  Money for the $30,000 campaign may come from an impact fund or be treated as a grant or program related investment (PRI) from a local foundation.

    If the target audience changes from the $500,000 campaign to the $30,000 campaign, the organization must also change its story.  The story must amplify the relationship with the leaders of the organization (friends, family, associates) or the positive impact on the supporter (strategic) or the positive impact on the community (jobs, economic activity, tax revenues) or addressing a community problem.  There must be an affinity between the organization and the supporter that is not based upon an investment return on investment.

    Since the $30,000 campaign is intended to pay the costs of the $500,000 campaign, it is possible that some of the costs can be deferred – a commercial line of credit – from the service providers (lawyers, accountants, IT, marketing) and other vendors.  This will act to reduce the actual cash that needs to be raised to less than $30,000, making the goal easier to attain.

    This topic and other topics related to investment crowdfunding will be presented by Colorado Community Capital PBC at Colorado Lending Source on October 27th (For more information or to register, go to http://www.coloradocapitalcongress.com/events) and at ComCap Colorado on February 1, 2017 (For more information or to register, go to https://www.eventbrite.com/e/comcap-colorado-tickets-27899952509).

    Karl Dakin

    Dakin Capital Services LLC

    kdakin@dakincapital.com

    720 296 0372


  • 19 Sep 2016 12:49 PM | Anonymous

    I first presented the concept of a ‘capital community’ in late 2014 as a needed component within a proposed capital ecosystem.  In this original vision, a ‘Capital Community’ was framed as “a collaboration of businesses, chambers of commerce, economic development agencies and programs, community foundations, civic organizations and churches” that would take a leadership role within a community to improve access to capital.

    Continuing work on the concept of ‘Capital Communities’ has led to refinement and expansion in concert with the concept of ‘Community Capital’ established by Hatch Innovation and the ComCap Initiative.  https://www.comcap.us/

     Definition: Capital Community is a group or crowd that acts in concert to support capitalization of one or more Main Street businesses, social enterprises or community projects with Community Capital.

    Definition: Community Capital is capital that remains in the community, comes from the community, and benefits the community - ultimately strengthening community.

    Community Capital, while inclusive of bank financing and angel investing, also includes every other form of capital that might be found within a particular community.  It may include grants, gifts, competition awards, government programs, program related investments and all forms of alternative financing.  Whatever gets the job done!

    In the original concept of a Capital Community it was anticipated that the Community would create an inventory of all capital within the community and that this information would be made available through a person or program that may be called a Capital Coordinator – a central point of knowledge and contacts. 

    The original concept had a very strong ‘geographic area’ look and feel.  ‘Local’ was considered to be a district, town or an area where ‘everyone knows everyone’.

    As investment crowdfunding has continued to evolve towards the largest approach to raising capital for startups, small businesses, social enterprises and community projects, so has the concept of a ‘Capital Community’ evolved.

    A Capital Community may now be defined as a geographic area.  However, the area may be a city block, a city, a region, a state, a country or the entire world.

    A Capital Community may also be defined as a vertical niche representing a social cause or industry – a grouping based upon common social goals or similar business interests.  For example, a Capital Community interested in greenhouses may be based upon a group of greenhouse manufacturers, a group supporting local food production or a group of community garden managers.

    The need for an inventory of Community Capital and for one or more Capital Coordinator’s remains.  How and where this information is collected and applied may take many forms.  A Capital Community may be an investment club, a civic organization, an impact fund, a charity or other organization.  The Capital Coordinator may be housed within one of these organizations or within a local chamber of commerce, economic development office or Small Business Development Center.

    An organization seeking to raise money through investment crowdfunding would greatly benefit if it becomes the center of attention of a Capital Community.  In addition to its own networks, an organization may gain the expected benefit of working with a Capital Community that may directly invest, provide support services to the capital campaign and introduce the organization within the given Community. 

    An organization may identify a Capital Community while completing a Stakeholder analysis of who may benefit from the success of the organization [see other articles on Stakeholders at Colorado Community Capital PBC- http://www.coloradocapitalcongress.com  or at @karldakin on LinkedIn -  http://www.linkedin.com/in/karldakin].

    This topic and related topics on investment crowdfunding will be presented by Colorado Community Capital PBC (formerly the Colorado Capital Congress) this Thursday, September 22nd at a workshop on Customer Crowdfunding at the Colorado Lending Source.  For more information or to register, go to http://www.coloradocapitalcongress.com/events.

    Karl Dakin

    Dakin Capital Services LLC

    kdakin@dakincapitalservices.com


  • 12 Sep 2016 9:43 AM | Anonymous

    Many entrepreneurs launch a business as a natural consequence of addressing a problem.  They take the first step on a journey that may lead to success.   Too often, entrepreneurs look at their feet instead of the horizon when taking that first step.  Their focus on ‘next steps’ will lead to action.  Action is to be rewarded over those who simply talk.  However, without a defined goal, it becomes difficult to determine if progress is being made and if one is moving fast enough down the path.  And, it becomes difficult to raise capital.

    Raising capital is largely an act of shifting resources of the future to make then usable today – a time machine.  This act is demonstrated by a loan where money is received today in exchange for its repayment with interest in the future.

    The person holding the resources today – an investor (however that may be defined) – must be convinced that an event will occur in the future that will result in their repayment – a return of their resources. 

    Investors do not invest in today.  They invest in tomorrow: the date in the future when they get repaid their investment.

    In order to obtain needed investment, entrepreneurs must create a vision of that future date with such clarity that the investor will part with their resources and make them available to the entrepreneur – a form of self-fulfilling prophecy. 

    The clarity of the vision may be measured in terms of risk.  A very clear vision represents a low risk.  A murky vision represents a high risk.

    The lower the risk, there will be more investors that will be willing to part with their resources.  The more investors willing to part with their resources creates a marketplace for the opportunity presented by the entrepreneur that drives down the price of the investment.

    Entrepreneurs must do everything they can do to create this clarity of vision.  These efforts are reflected in strategy and planning, in knowledge of markets and customers and in the design of the products and services down to the finest detail.  There must be defined and measureable goals.  Each goal will have a number of milestones that will show progress towards success.  All of this information must be recorded and shared with members of the team to assure agreement and understanding of individual responsibilities.  This same information must be presented to prospective investors to share with them the clarity of the vision thereby reducing their concerns about the risk of the venture.

    In reality, no plan is perfect.  Projections seldom come true.  Businesses fail.   However, it is well recognized by investors that a good strategy will adapt to changing conditions and will evolve as a business grows with a higher probability of success.

    It has been said that a good business plan and management team will attract investment.  The alternative is an unending series of capital pitches that never results in funding.

    The entrepreneur should not start a new business without his or her goal clearly in mind.  This may be solving or mitigating a problem.  It may include selling out the business to someone else who will grow the business to be all it can be.  It may be something else - as long as the finish line is so well marked that everyone will know when it is crossed. 

    Investors may join the entrepreneur for part or all or part of the journey.  This is another value for milestones.  Different investors may support the entrepreneur at different time and in different ways.  They all need milestones to frame their investments.  The raising of capital is its own milestone.

    The entrepreneur may need to develop a new skill in talking in milestones like a conductor between train stations calling out the next stops and estimated time of arrival. Some entrepreneurs may find this form of expression difficult to master and will need to be able to put on their money raising hat and assume the role of the pitch person when called upon.

    The end of the story is the beginning point for planning and the recruitment of resources.

    This topic and matters related to investment crowdfunding will be presented at a workshop on Customer Crowdfunding on the morning of September 22nd at Colorado Lending Source by Colorado Community Capital PBC (formerly Colorado Capital Congress).  For more information or to register for this workshop, go to: http://www.coloradocapitalcongress.com/events

    Karl Dakin

    Dakin Capital Services LLC

    720 206 0372

    kdakin@dakincapital.com


  • 11 Aug 2016 8:17 AM | Anonymous

    One of the most challenging situations for an entrepreneur is making a pitch to an angel investor and getting the question “How much money have you invested in your business?” and having to a respond with “No money, just my time”.  Typically, the reaction either explicitly or otherwise is dismissive.  Your time is given little or no value.  There is somehow a higher value placed upon a cash investment than upon your time.

    To make matters worse, your own actions or your budget or your use of proceeds statement reinforces this position because you are taking no salary or a salary that is only a fraction of what you would earn if you were working for someone else.  Even where your salary is built into a cash flow projection, it often fails to account for direct and indirect benefits of employment such as health care insurance, mileage and expense reimbursement or vacation.

    So, what is your time worth?  A starting point would be the highest paid job for which you are qualified – wages, commissions and all benefits.  Set aside for this mental exercise the fact that you may not work well with others, that you can’t stand office politics or that you may be facing a glass ceiling based upon your gender, race or cultural origin.  Identify jobs that you can perform well and determine the compensation package.  This is your market value.  It should be a benchmark in measuring the value of your time when you invest it in your business and when you compare it against cash investments.

    I have seen many entrepreneurs take the position that their time has little value because they are just starting a business or that they are working on a prototype or working in their spare time.  This position confuses the value of your time with the potential value of the business – two related, but different value propositions.

    If you work on your business for a year and it fails, you still invested the market value of your time even though the business end up having no value.  This may make you a bad investor, but it does not devalue your time.

    I have also seen people place a high value on their business because of the amount of time they have invested.  Again, this is confusing the issue of one’s time with the value of a business.  A business is worth the benefit that it creates in its products and services, its profits and its impact on the community.  To different investors, this value may vary greatly.  However, the amount of time that you invested does not increase the value.  It is what it is.  So, you must invest your time wisely.

    Early investments into a new business are high risk.  There should be a commensurate reward.  Although the amount of time that you invest in your business is independent of the value of the business, it should be a factor in dividing up the rewards of success.  You should get a multiplier on the reasonable value of the time that you have invested in the same manner that an angel investor should get a multiplier on the value of their cash.

    However, again, if you have used your own time poorly, then you have to give greater value to other time or resources that have been invested. This is the one situation where an angel investor may rightly claim that their cash has greater value.  If you could have hired someone to achieve the same outcome for less cash than the value of your time contribution, then you are making poor use of your time.  Jeffrey Gitomer, in his Little Green Book of Getting Your Way, states that you should always hire someone to do any work if that person will work for $15/hour or less.  In other words, as an entrepreneur, you should be worth more than $15 an hour. 

    As an exercise, track your time in 10 minute increments throughout each day for a week and analyze how you spent your time.  If you find yourself doing anything that someone could do for less money, consider hiring someone if you have the money or raising money where the combined cost of the money and the person is still less than the value of your own time.

    Too often, as an entrepreneur, you get caught up in situations where it is quicker to do it yourself than to explain to someone how to do it.  That reasoning is acceptable if the situation is a first of a kind and there is no rule book, but not acceptable if it occurs repeatedly in a common situation.  How often have you used a new feature on your cell phone without taking advantage of any online tutorial that would have resulted in quicker results with greater success?

    There is also a tendency of entrepreneurs to do it themselves – DIY.  This may be ‘Penny wise and pound foolish’.  Entrepreneurs must continuously assess the use of their time to engage in highest and best use of their talents.  This is true whether one is taking out the garbage or drafting a legal contract. 

    At the end of the day, particularly when you are tired and frustrated, you must remember that time is your most valuable resource and it is not unlimited.  There is only so much you can do.  Time management is a good investment that will serve as a guideline for making investments of your time.

    This and other topics related to raising capital will be addressed in the upcoming workshops on Customer Crowdfunding that will be presented by the Colorado Capital Congress PBC at Colorado Lending Source on August 25 and September 22.  For more information, go to http://www.coloradocapitalcongress.com/events

    Karl Dakin, President

    Dakin Capital Services LLC

    7148 S. Andes Circle

    Centennial, CO 80016

    720 296 0372

    kdakin@dakincapital.com


  • 25 Jul 2016 9:57 AM | Anonymous

    Things are going to get busier in the newest segment of Colorado’s capital industry.

    Invest Local LLC (http://www.InvestLocalColorado.com), that was created late last year to provide investment crowdfunding services in Colorado, is now on schedule to open the first Colorado crowdfunding platform on early August.  This milestone completes the last major link to opening up investment crowdfunding in Colorado under the Colorado Crowdfunding Act that was passed into law last year.

    It is expected that a large number of small businesses, social enterprises and community projects will take advantage of this new and greatly different way of raising capital.

    At this time, although a number of businesses are developing their capital campaigns, no organization has yet completed its preparations and obtained authorization from the Colorado Division of Securities to conduct a crowdfunding campaign under the Colorado Crowdfunding Act.  Therefore, to help everyone learn what a campaign looks like, the Colorado Capital Congress PBC will post up a fictional demonstration campaign for Space Port Pub LLC.  The posting will include a regulatory disclosure form, CF-2, and an offering memorandum.

    This demonstration is a component of the educational program, Customer Crowdfunding, that is being developed and presented by the Colorado Capital Congress PBC. The Colorado Capital Congress PBC was established as a for profit social enterprise in late 2014 to improve Colorado’s capital ecosystem.  Workshops on Customer Crowdfunding are held monthly at Colorado Lending Source.  The next two workshop dates are August 25 and September 22.  For more information or to register, go to http://www.ColoradoCapitalCongress.com/events

    The Colorado Capital Congress PBC is currently conducting its own investment crowdfunding campaign under Colorado’s Limited Offering law.  Money raised through this campaign is being used to develop and present two educational programs: Customer Crowdfunding (how to raise money through investment crowdfunding) and Main Street Investing (how to invest in a business in your backyard through investment crowdfunding).  Information on this offering may be obtained at Karl@ColoradoCapitalCongress.com

    The fictional narrative regarding Space Port Pub LLC is used to illustrate a consumer approach to crowdfunding that combines product/service rewards with investment securities.  This approach is targeted to non-accredited investors with the goal of providing money saving rewards equal to or greater than the amount of financial support invested in local businesses before taking into account any equity, debt or revenue sharing.

    Additional educational programs are planned for service providers and community leaders supporting community capital campaigns.

    Upon launch of its first crowdfunding platform, Invest Local LLC is prepared to quickly launch a second platform for Colorado Limited Offerings.  This alternative form of intrastate investment crowdfunding in Colorado has a $5 million dollar limit and does not require the use of a registered intermediary.

    To rapidly scale use of investment crowdfunding in Colorado, the Social Impact Chamber of Commerce, led by Rebecca Saltman, is preparing to launch the Colorado Community Capital Demonstration Program.  An impact fund will be raised through a statewide investment crowdfunding campaign.  The Program will use the impact fund to finance individual capital campaigns by small businesses, social enterprises and community projects across Colorado.  Each organization selected to receive support from the Program will participate in an eight week boot camp on raising community capital provided by the Colorado Capital Congress PBC, be provided with a paid mentor, planning, marketing and other services by The Capital Guild, and may raise money on one of the Invest Local LLC  crowdfunding platforms.  If successful in raising capital, the organization will pay back the Program the costs advanced for their education in conducting a campaign.  Discussions are now being held with economic development agencies, civic organizations and foundations on conducting community capital demonstrations in different locations within the State.

    To further support the ecosystem, The Capital Guild LLC will be established as a cooperative of service providers to support local community capital campaigns. Service providers will include marketing and public relations, capital strategy and planning, information technology, customer relations management, communications, accounting and legal services.

    Finally, planning is underway for ComCap Colorado.  This one day, statewide conference on community capital will bring together community leaders from across the State of Colorado to learn about and plan local community capital demonstrations.  This event will be hosted by the Colorado Capital Congress PBC and one or more other organizations with the support of Hatch Innovation of Portland, Oregon.  Discussions are now being held with sponsor, speaker and exhibitor candidates.

    Collectively, these organizations, activities and events represent an evolving ecosystem where it will be possible for an organization to raise the capital it needs from its own community within the State of Colorado.

    For more information on the new Colorado Capital Ecosystem, contact:

    Karl Dakin, President

    Colorado Capital Congress PBC

    7148 S. Andes Circle

    Centennial, CO 80016

    720 296 0372

    Karl@ColoradoCapitalCongress.com


  • 19 Jul 2016 11:15 AM | Anonymous

    In working with many organizations (businesses, social enterprises and community projects) that are seeking capital, a common question is “What is the fastest money?”  Although every organization typically has many possible sources and types of capital (equity, debt, revenue share, gifts, grants, earned income from friends, partners, customers, angels, funds, foundations and venture capitalists) the time to raise the money is a critical factor.  Every entrepreneur I know, including myself,  wants to raise money ‘yesterday’.  It doesn’t matter how many options you have if you don’t have the time to realize them.

    No matter how much planning and preparation has gone into starting and growing an organization, there is always a gap between needed and available resources.  This gap creates stress if nothing else.  The gap may place the entire opportunity at risk for inability to obtain needed personnel or equipment or to attain an early milestone.

    You may need quick money to get to other money.

    First, there may be no quick money.

    If quick money is available, it can come from someone or an organization that has the following characteristics:

    • They need what you have (or that you can produce quicker than anyone else)
    • No one else can provide what you have
    • Their need is great (without what you have they will suffer greatly – possible loss of life, property or something that the capital source holds in highest regard)
    • They know you exist
    • They believe that you can deliver what they need
    • They have the capital resources you need, in hand, and ready to make available to you

    This is a relatively rare situation where providing you with capital is the quickest path to an outcome desired by the source of the money.   In effect, you are meeting the needs of an ultimate customer who can afford not only to buy a single product or service, but can also afford to fund your business and is willing to do so because they feel they have no other choice.

    Too many entrepreneurs and startup organization make the mistake that they fit in this situation.  They do not meet all of these criteria and do not understand that fact.

    However, many entrepreneurs and startup organizations qualify for quick money, but they pitch to the wrong people.  If you do an analysis of who may provide quick money, it may reveal previously untapped sources.

    I have seen pitches that claim all of these criteria when seeking money from angels, venture capitalists and other institutional investors who are only seeking a return on their investment.  Since all opportunities offer some level of ROI, then the organization is not unique in the eyes of these sources of capital.  So, without more, this money is not quick because it has the choice of looking at other investment opportunities which may pay out a higher ROI or have a lower risk of failure or both.

    Another possible quick source of money has the following characteristics:

    • ·         They know you (not just recently met you at a pitch session or party)
    • ·         They trust you to pay back their money under any situation
    • ·         They have the capital resources you need, in hand, and ready to make available to you

    This situation may occur for several reasons, but it is still is relatively rare.  In effect, someone will give you money because they are not worried about not getting it back.

    Friends and family fall into this category, but not all friends and family will qualify.

    Certain strategic partners and angel investors may fall into this category because of past business where a relationship has been established and a level of trust has been established.

    In order to obtain money from these resources, you need to be able to pick up the phone and ask for the money you need and make the statement “I am good for it” and they believe you.

    Slower, but still rather quick money is available from certain financial institutions because you have committed enough of your own resources and/or you will provide something as collateral of sufficient value (your house, your car, the assets of your business, your stock investments in other businesses, etc.) that there is no possibility that they will lose any money.  In this situation, they do not have to trust you, because if you fail their investment is covered by your assets.  Because this source of money requires submission and approval of an application, it may take a number of days to a number of weeks to obtain needed money.

    Everything else takes more time – possibly too much time.

    If you don’t have a time machine that allows you to go back in time and start building these critical relationships, then there may be no quick money.

    If you are not already wealthy and able to apply your own resources, then there may be no quick money.

    Other sources of capital require building a relationship, demonstrating the capabilities of your innovation, generating sales or even earning a profit.  All take time.  In developing your business plan and completing your capital strategy, time must be factored in.  In scheduling a capital raise, time must be allowed for talking to all of the people that don’t care about you and your business and who will not invest.  Profiling possible investors will speed this process, but it always takes time.

    If you don’t need money right now, you should set the stage so that money is available as needed, when needed at a price you are willing to pay.

    This issue and others related to raising money from within your community will be addressed at the upcoming workshops on Customer Crowdfunding that will be presented by the Colorado Capital Congress at the Colorado Lending Source this Thursday, July 21 and again on August 25th and September 22nd.  For more information and to register, go to http://www.coloradocapitalcongress.com/events

    Karl Dakin, President

    Dakin Capital Services LLC

    7148 S. Andes Circle

    Centennial, CO 80016




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