Brian Beckon is a Bay Area-based attorney with over 25 years of experience working for nonprofits, start-ups, and publicly-traded companies. He’s a principal of Cutting Edge Capital and Cutting Edge Counsel, focusing on direct public offerings, corporate structuring, and strategies for community capital to help build a more equitable economy. Recently, Small Change’s Ben Schulman sat down with Brian for a crowdfunding chat.
Small Change: Break down the Cutting Edge Capital model for us. How do you work specifically to bring investment opportunities to those previously unable to access such?
Brian: Cutting Edge Capital’s mission is to help build a more inclusive and equitable economy by opening up opportunities for everyone to invest locally and in alignment with their values. We do that by helping ventures raise community capital using legal offering strategies that allow anyone of any economic class to investment. We work closely with our sister law firm, Cutting Edge Counsel, which handles the legal work.
Small Change: Do you think more opportunity for impact lies under Reg A or Reg CF raises? Or do you see them as serving different purposes?
Brian: Reg A and Reg CF are kind of at opposite ends of the spectrum of community capital strategies. Both can reach a nationwide investor base, but Reg CF is available for offerings up to $1.07 million, and Reg A is best for offerings over $5 million. So there’s virtually no overlap, and both can be very impactful. In between them are some of the lesser-known strategies like an intrastate offering (Rule 147) or the multi-state offering (Rule 504), each of which is registered with one or more specific states and doesn’t reach a nationwide audience. So there is a whole menu of available strategies; which of those is best depends on factors like how much capital is needed, and whether the venture has a local focus or is of interest to a nationwide audience.
Small Change: As awareness of equity crowdfunding expands and the industry grows, do you see municipalities – or other governing bodies – getting involved in raising funds for themselves?
Brian: Yes, government entities can also raise capital using these more innovative strategies. Governments tend to be reluctant to move beyond the traditional strategies, which entail high transaction costs; but in this era of municipal budget cuts, there may be an opportunity for innovation there.
Small Change: One last question, as a cheat: what makes you most excited about equity crowdfunding’s potential for community development?
Brian: What gets me most excited is the opportunity for a whole community to come together and invest in local assets and institutions. This is empowering for those in the community who otherwise might never have an opportunity to invest locally, and it should lead to greater civic engagement. This also leads to two results that directly impact community development: First, the profits from those investments will circulate in the community and will lead to greater local wealth-building. And second, those community investors will be more likely to invest in local start-ups or expansion of local businesses, which will further grow the local economy. At the end of the day, this will bring more economic power to local economies and will help the community become more resilient as well as more equitable and inclusive.
Learn more about Cutting Edge Capital here.
The views expressed above may differ from the views of Small Change and its employees and should not be considered or relied upon as an investment recommendation or legal, investment or tax advice. Any opinions, representations, projections or comparisons are for informational purposes only. These are general conversations about the ever-changing and wonderful world of crowdfunding.
Feature image by Michelle Picker for Small Change. Derived from this image licensed under CC BY 2.0 and this image licensed under CC BY 2.0