In previous articles, I went over the very basics of what intrastate equity crowdfunding is and why you might choose to use it to finance your business. Today, I want to discuss some issues with crowdfunding that make it harder to use in Alaska than it needs to be, and give some direction on how to overcome a few of them.

In the last article, I introduced the concept of intrastate equity crowdfunding as a fundraising mechanism for for-profit businesses in their early stage. This article continues the series by discussing why an entrepreneur or company might choose intrastate equity crowdfunding versus the other available options. To start, we'll look at what fund-raising options exist within the law. Then we'll look at some pros and cons of intrastate equity crowdfunding as against those other options.

I had the great privilege to moderate a discussion a few weeks ago on equity crowdfunding in Alaska. We had what (I hope) were some great questions, and very good interaction. As a result of the discussion it became clear that (1) Alaska is in a great position to drive a lot of vibrant new business in the next few years; (2) equity crowdfunding is one of many excellent mechanisms that exist in Alaska to help concentrate capital where we need it; but (3) the state is badly under-resourced to get that work done.

Small business owners sometimes see more than their share of IP infringement and takedown notices, cease and desist letters, and outright threats. Invariably, these come from business competitors. Whether valid or not, they can be a massive drain on the resources of a small company. So what can be done about them?

Investors and entrepreneurs each need to feel as if the allocations of risk inherent in an investment transaction are fair. But in accounting for what is fair, both parties must look past the book value of contributions, and entrepreneurs need to be sure to be honest with themselves and fully account for the contributions they make to the business.

The Entity Transaction Act, effective July 2014, will vastly simplify some types of conversions, and is a welcome process improvement.  But it is not a panacea - these sorts of transitions will continue to be complex, because they touch on so many other areas of law and process.  If your company is considering a transition from one form to another, you should analyze whether you can afford to wait until summer 2014.  If so, converting under the Act may substantially simplify and cut the costs of conversion.