The JOBS act allows entrepreneurs to raise capital for start up and small companies through crowd funding online. However, regulations will not be implemented until January 2013. The Securities and Exchange Commission (“SEC”) has 270 days to figure out how to regulate funding which targets non-accredited investors. The following is a partial list of the items in which you can do to get ahead while waiting for the law to be implemented: • Incorporate you business;
• Start writing your business plan, or refining it, if you already have one. This will assist you determine the amounts of financing you are looking to raise. In addition, a well thought out business plan outlining your current and future business expectations will alleviate many questions in which may arise during a due diligence process;
• Get you accounting records complete and accurate. Good accounting will benefit you when attempting to present the viability and growth of your business. The more information you are able to generate on a timely basis will provide additional credibility. If you plan on raising funds under $100,000, the officer of the company needs to certify the financial statements and state they are accurate. So you will want to ensure the records are adequately prepared;
• Get your CPA and/or accountant involved to assist in the process. If you plan on raising $100,000 -$499,000, then you need to have the financial statements reviewed by an independent public accountant. Any funding over $500,000 requires audited financial statements. It is never too early to get this process started. A first time audit/review can take any where from 30 - 60 days depending on the size of the organization.
If you have questions in connection with crowdfunding or would like to gain additional information regarding this topic. Please contact dbbmckennon at one of its two offices located in Southern California or via email. dbbmckennon is a full service CPA firm specializing all financial and tax compliance areas. In addition to providing audit and tax services, dbbmckennon provides bookkeeping and interim controller/CFO type services to assist small business owners in the management of their operations.