FAQs: The Basics

• What is BankRoll?

  BankRoll is a technology platform that provides investors with access to investment opportunities, and companies with access to investors. BankRoll was founded to allow investors and companies raising capital to have an online platform to use the revolutionary new JOBS Act equity crowdfunding laws and rules. BankRoll launched on June 19, 2015, the same day that Title IV of the JOBS Act, also known as the Regulation A+ Mini-IPO, went into effect.

• How does BankRoll Work?

  Companies use BankRoll to raise capital from “the crowd.” BankRoll allows a company to set up an offering page where they can simplify the equity crowdfunding process by accessing investors all over the world. BankRoll lets a company show a video, display a pitch deck, hold a webinar, execute legal documents and process investments from start to finish, all in one convenient online location. Investors use BankRoll to look at investment opportunities and to invest online. Investors have access to a funding company’s videos, pitch deck, legal documents and all other materials related to the investment opportunity, without ever leaving their desktop.

• Who are the people behind BankRoll?

  BankRoll was co-founded by Kendall Almerico, one of the country’s leading JOBS Act attorneys and one of the world’s top experts on equity crowdfunding, and Tess Hottenroth, who is now the CEO of BankRoll Women. Kendall has put together an in-house and strategic partner team that includes top experts in finance, compliance, securities law, accounting and marketing. For more on the BankRoll team, visit our About Us page.

• Who is Kendall Almerico?

  BankRoll’s Co-founder and CEO Kendall Almerico has been named “one of the top crowdfunding and JOBS Act attorneys in the country” by Forbes, one of the 20 most influential thought leaders on crowdfunding in the world by Venture Beat and one of Inc. magazine’s list of “Top 19 Crowdfunding Experts Startups Need to Know.” Kendall and his crowdfunding sites have appeared in the New York Times, USA Today, Washington Post, Washington Times, Huffington Post, Forbes, Bloomberg, Reuters, the New York Daily News, Business Insider, Christian Science Monitor and hundreds of newspaper, blog, radio and television interviews including CNN, CNBC, CBS, ABC, NBC, FOX, CCTV, Fox Business Network and Bloomberg TV. Kendall is a regular crowdfunding columnist for Entrepreneur.com and a highly sought after international keynote speaker. Kendall practices law with the law firm of DiMuroGinsberg in the Washington DC area.

• What is crowdfunding?

  Crowdfunding is simply raising funds from a crowd of people. The term might be new, but the concept is not – if you’ve ever been to church and seen a collection passed around, you have witnessed crowdfunding in action. The term “crowdfunding” generally applies to using the internet as a means of raising money online by collecting (relatively) small amounts of money from a large number of people.

• Is this like Kickstarter?

  Not quite – there are two different types of crowdfunding. BankRoll is a platform for equity funding, which means you can raise funds by offering equity or debt to investors who then have the potential to earn a return. Sites like GoFundMe, Indiegogo and Kickstarter offer rewards-based crowdfunding. They allow users to raise money by pre-selling their products or offering rewards in return for donations, but users cannot give away or sell any part of their business.

• What is the difference between rewards and equity crowdfunding?

  Sites like Kickstarter, Indiegogo and GoFundMe are all rewards-based crowdfunding platforms. They allow people to raise money for a project by offering some sort of perk or reward in exchange for contributions. They are not allowed to sell ownership or equity in a business to raise funds. Other sites, like BankRoll, utilize equity crowdfunding. We allow entrepreneurs to raise money for their business by selling stock or convertible notes. If you give someone money on a rewards-based crowdfunding site, you are either making a donation or purchasing a product that doesn’t exist yet. If you give someone money on BankRoll or another equity crowdfunding site, you are investing in the company. Please keep in mind the speculative nature of the securities offered through equity crowdfunding and the potential for complete loss of your investment.

• How many companies successfully raise money through crowdfunding?

  Plenty. Crowdfunding was a $34.4 billion industry worldwide in 2015 and it has been rapidly growing every year since 2011.

• Are all equity crowdfunding offerings the same?

  No. There are several different types of offers that are suitable for different types of issuers as well as different classes of investors. Different laws apply to different offerings. Some offerings are only available to “accredited investors” and others are available to anyone who wants to invest. Also, some companies are selling equity and others are raising funds through debt or convertible debt. You should carefully read each company’s documents on BankRoll for each offering and understand the type of investment before you invest.

• What is the difference between debt and equity crowdfunding?

  If you buy equity in a company, it means you are buying ownership, usually in the form of shares of stock or some other kind of economic interest. Debt financing refers to a method of funding where a company gives investors a promissory note in exchange for funding. The promissory note may include interest to the investor, the option to convert the note to stock rather than having the loan repaid (often called a “convertible note”) or other terms and conditions. You should carefully read each company’s documents, including the terms of any promissory note, on BankRoll for each offering before you invest.

• Is equity crowdfunding only in the U.S.?

  No, the U.S. is actually late to the crowdfunding game. Australia, the U.K. and the Netherlands have allowed equity crowdfunding for several years with successful results. The U.S. Congress passed the JOBS Act with bipartisan support and President Obama signed the bill in April of 2012. But it was not until June 2015 that the first portion of the JOBS Act that allowed anyone in the crowd to invest, became law.

• What is general solicitation?

  General solicitation allows a company seeking funding to advertise or market the offering to potential investors. Most forms of general solicitation for private companies was illegal in the United States for more than 80 years, until the JOBS Act was passed in 2012. Now, companies using JOBS Act equity crowdfunding can market their offerings, using general solicitation as allowed by the new laws. The reason general solicitation used to be illegal is quite simple. When the Securities Act of 1933 was passed banning general solicitation, the country was still reeling from the stock market crash of 1929. Fraud was an issue in the market and investors couldn’t easily access information or verify claims made by companies. In order to protect consumers from fraud, so the SEC established a ban on general solicitation. For 80 years before the JOBS Act, a broker-dealer or representative of a private company seeking funding would have to find accredited investors without publicly advertising the offering. Title II of the JOBS Act changed that, and now allows these companies to talk about their offering publicly – whether it’s through traditional media or online or through social media – to attract potential investors. And now, with Title IV of the JOBS ACT becoming legal in 2015, and Title III in 2016, companies seeking funding under these provisions can generally solicit investments from the general public, not just accredited investors, as long as the limitations of the JOBS Act and other laws are followed.

• How does BankRoll protect my personal information?

  We take the security of your personal and financial information very seriously. All communication between your browser and BankRoll is encrypted using the Secure Sockets Layer protocol (SSL).

• Are these investments risky?

  Yes. All investments are inherently risky, and startup or early stage businesses are generally considered more high risk than established businesses. That’s why it’s so important that before you invest in any offering, you do your own due diligence so you understand not only the business and investment, but also the risk factors specific to that company. If you cannot afford to lose the money you plan to invest if things do not work out as the company hopes, you should not invest. Read and understand the documents each company provides on BankRoll and talk to your own advisors before you invest.