Attorney to show how companies can WIN
A Jackson attorney hopes to demystify and spread the word about Wyoming’s new equity crowdfunding option for entrepreneurs by giving a talk next week and launching a new business.
On Jan. 17 Matt Confer of RPK3 Law will lead a Lunch and Learn presentation for Silicon Couloir on the ins and outs of WIN (Wyoming Invests Now) and other securities exemptions for businesses looking to raise money. The questions he has received, he said, indicate a need for accurate information.
“There seemed to be a lot of misunderstanding about what the WIN exemption is,” he said.
The state Legislature created Wyoming Invests Now for businesses and investors in Wyoming. It lets companies cast a wider net by enabling them to generally solicit unaccredited investors. That means they can advertise throughout the state and seek funds from people who don’t meet the high-income and net-worth requirements of accredited investors.
The state is trying to grow a “social-support network” for its businesses, Confer said, by involving residents in Wyoming-based companies. WIN particularly benefits startups in places without the entrepreneurship programs found in Teton County, where the owners of emerging businesses rub elbows with people who have the means and interest to put money into their ventures.
“In other parts of the state they really don’t have that network,” Confer said. “They have to reach out to people they don’t have a relationship with.”
WIN investors will be people looking for a return on their money. That’s different from reward-based crowdfunding, such as a Kickstarter campaign, where a pledge buys a new product, or donation crowdfunding, like a GoFundMe drive to raise money for a bereaved family.
WIN can be used to raise up to $4 million, though Confer sees it as mostly for those seeking $1 million or less. Accredited investors can put in as much money as they want, even up to the full amount. But unaccredited investors — who are presumably less sophisticated — are limited to $10,000 each.
So far, the only company to take the plunge with WIN is McGinley Orthopedics, of Casper.
One of the misconceptions about WIN that Confer has come across is that the only thing a business needs to do is fill out a simple form. In fact, he said, it’s a long process.
WIN entails “a pretty detailed form about the company,” he said. “You have to go to the secretary of state before any offering is made. You have to put a lot more time and energy to make the offering.”
During the Lunch and Learn talk (see box for details) he’ll go over the things potential WIN companies have to think about.
One, for example, is the type of offering: equity, debt, convertible equity or convertible debt. Another is the rights and privileges associated with that investment, or, in Confer’s words, “when people put in money, what are they actually getting.”
Then there’s the question of whether a company qualifies for WIN. Confer will discuss avenues to consider when WIN is not an option, including something called the Rule 506(b) securities exemption.
Confer is starting a consulting company, WyomingWINS, and an intrastate equity crowdfunding portal, WyomingWINS.com. He will help businesses apply for WIN offerings and will also provide resources for people to research and invest in Wyoming businesses.