Once again, we would like to thank our community for its wonderful support in our investment crowdfunding process!  We have about 40 investors with investment sizes ranging from $1,000 (our minimum) to $25,000.

We would like to take this opportunity to share what we learned.

On December 8, 2011, CEC submitted its application to the California Department of Corporations to conduct a Direct Public Offering.  On July 1, 2013, we met our fundraising goal.  Why did it take so long?  We were still new to the process of California DPOs and we had a lot to learn about what the state is looking for.  Also, the security we offered (a revenue sharing agreement) was unusual and the state had lots of questions about it.  Finally, we took a whole year to reach our fundraising goal after we received our permit from the state.  If we had it to do all over again, we think we could get it done much faster!

What have we learned from the experience?

Getting ready for filing

  1. Think through your offering carefully before submitting it and have multiple people proofread it – once you submit it, it is much harder to change or make corrections and errors can slow things down.
  2. Run multiple financial models of best and worst case scenarios and several in-between scenarios – make sure your financing plans make sense in every realistic scenario.
  3. Develop a marketing plan for selling your securities and prepare your advertising materials in advance – ideally they should be submitted with your application to the state regulators.

During the approval process

  1. Don’t procrastinate about responding to questions from the regulators – prepare a written response as quickly as possible.
  2. Don’t be afraid to call the staff person assigned to your case – he or she can often provide guidance on how best to respond to questions and comments.
  3. Make a list of people and/or groups of people that are good candidates to invest in your venture.
  4. Practice your pitch!  Your pitch may evolve throughout your offering and may differ depending on your audience but be prepared for every situation.  If necessary, practice with a trusted advisor.
  5. Get ready to hit the ground running when you get approval – it can happen when you least expect it and then the clock starts ticking!


  1. Even though you will probably have a year to raise the capital, try to give yourself a shorter deadline – when you know you have a year it is easy to procrastinate.  Also, a year can go by very fast – make the most of your time!
  2. Don’t be shy!  Call everyone you know (that is eligible to invest) and ask!
  3. Always ask your investors to help you find other investors.  Your investors can be some of your most compelling and effective advocates.

We had some great experiences throughout the process with investors, as well as potential investors that decided not to invest.  We were asked some great questions that helped us further define our strategy and goals.  We got a chance to talk about CEC and our passion for our work to lots of very interesting people – both our existing network and new allies we met as a result of the process.  We learned that the world of both accredited and unaccredited investors is amazingly diverse.  Some were very open to investing in our DPO which was admittedly a non-traditional investment.  Others had lots of questions and had trouble wrapping their minds around an investment opportunity that was so different from the mainstream model.

Some highlights:

  • Our first investor was our largest and contributed much more than cash – this person continues to make productive referrals and connections for us
  • Quite a few of our clients invested
  • Quite a few of our family members invested
  • Staff members with very modest salaries invested
  • Some of John’s former students from Presidio Graduate School invested
  • We announced our DPO at lots of public events but did not receive many investments that way
  • However, at one event, we ran into one of our investors and told him that we were still looking for more investors – he ran up to several of his friends at the event and encouraged them to invest – a few of them did!
  • Only a few of our investors were people we had never met before – most were connected to us in some way

We are thrilled to have completed the process!  We are already spending the funds we raised on some incredibly valuable things – a video about DPOs produced by Freerange, software to expedite the DPO process, and a web-based platform for DPOs.  These are expected to go live in the fall.

Thank you so much to all who invested as well as those who listened to all our pleas for investments for the last year.  We look forward to devoting our full attention to the movement to connect New Capital with a New Economy.