How does Small Change work?
Small Change is a real estate investment crowdfunding platform. Now that’s quite a mouthful, but simply put it means this – we match investors with developers raising funds for transformative real estate projects, to make better cities everywhere.
We do this by using some securities regulations which are known as Regulation Crowdfunding (Reg CF) and Regulation D (Reg D), sometimes independently, and sometimes together as “side-by-side” offerings. These regulations prescribe how we can help raise funds for developers and the rules we must follow.
What does it cost to raise funds on Small Change?
You’ll pay two fees per campaign. The first is an on-boarding fee which covers the cost of getting you ready to go live. The second is an offering fee which covers the cost of raising the funds. Simply put:
- On-boarding fee: $2,500
- Reg CF offering fee: 6.5% of amount raised
- Reg D offering fee: Fixed negotiated fee
If you conduct a side-by-side raise (Reg CF + Reg D), then your offering fee will follow suit and be a combination of the two offering fees above.
We include a lot in our on-boarding fee. Our goal is to get you ready to go live. We’ll provide:
- Assistance with preparation of the Form C and disclosure packet
- Legal templates for LLC agreement, investor agreements and more
- Compliance review of your business plan narrative
- Form ID filing and access code generation
- Forms C and C-U filings
- Set up of bank account ready to accept investor funds
- Creation of online offering page
- Guidance on creation of appropriate marketing materials
Also include are 5 investor verifications if you are offering Reg D, and monthly bank account fees. There are a few more costs that you should count on. Bad actor reports are required as are financial review reports if you are raising over $107,000 through a Reg CF offering. Marketing is optional but recommended. And you might want to make a video. You can download a list of anticipated costs here.
Is my project ready to list on Small Change?
We assess a number of criteria which include:
- That your project fits our mission and scores at least 60% on our Change Index;
- That you (or your team) has relevant real estate development experience; and
- That your offering goal is at least $100,000, and most importantly
- That you have a network of friends, family and neighbors who care about your project.
If your project is eligible, we’ll ask you for additional materials which will include, but may not be limited to, proof of property control, a project budget & pro-forma, a business plan and a thoughtful outreach strategy.
And finally, we’ll need to know about you and your team. We’re looking for developers who have a great project idea and have the skills and tenacity to complete it.
Want to get started? Go ahead and complete this form.
If your project is not a fit, we’d love to hear from you again, whether you develop your project further or move onto another one.
What if I’m a first time developer?
If you believe you have a great project but don’t have the requisite developer experience, we can help. Just say complete this form and we’ll let you know how we can help with our consulting services.
What if my project is in an Opportunity Zone?
Opportunity Zone or not, we need to assess your project based on a variety of criteria – whether it fits our mission and whether the business plan makes sense and whether your project will be ready to break ground soon. If you’ve already reviewed the criteria listed in “Is my project ready to list on Small Change” then go ahead and complete this form and we’ll get right back to you.
How long will it take for my offering to go live?
This really depends on you more than us. Expect the process to take a minimum of 6 weeks from first submission to going live. If you are super organized, it could take less time.
How long will it take to raise funds?
That depends on how much you are raising, on what you are offering investors and most importantly, your commitment to reaching out to your network.
Your network is critical to a successful raise.
Industry data suggests that approximately 80% of funds are invested by people you know, their family and people they know.
I’m ready to get started …
If you’re ready to get started now, follow the link to this form, the first step in our listing process. Give us a moment to review and test its fit for our platform. We’ll get right back to you!
When should I incorporate my company?
We’ll help you to incorporate your company for a slick, end-to-end offering process.
But take note. Our disclosure packet is a suite of templates that are built around a Delaware operating agreement. We’re going to provide this to you free. If you incorporate in another state, or with a different operating agreement, you’ll have more work. You’ll need to update our templates to match your operating agreement.
When you are ready, click here and complete this form.
When should I apply for a background check?
What will I need to prepare?
You’ll need to provide lots of great visual materials to illustrate your offering online.
Make a video. We’ll provide a template storyboard. Take 50 fabulous photos of your project and the neighborhood. Make sure they are landscape format and at least 1MB each. And send us a high quality photo of you.