Below is an article by PBS MediaShift entitled "Online Platforms Give the First Public Look at Private Equity".
Online Platforms Give the First Public Look at Private Equity
By: Paul Spinrad, PBS MediaShift
September 24, 2013
A major change in federal securities regulations takes effect this week, and many people are wondering how it will turn out. It’s now legal — with the proper filings and for the first time in over 80 years — for businesses to publicly advertise for investors. Proponents hope that this change will spur entrepreneurship, job creation and innovation nationwide, particularly in areas outside of the typical startup hotspot cities. Detractors fear that the regs will provide a new mechanism for fraudsters to scam retirees and others out of their wealth. Either way, the system known as “private equity” won’t always be so private anymore — and as of Monday morning, several online platforms discussed below are giving the public its first look at the formerly secret world of startup investing.
EquityNet
Arkansas-based EquityNet may be an outsider to the circles traveled by other platforms described here, but the company reports that thousands of entrepreneurs have used it to raise over $200 million. Rather than curating its deals subjectively, EquityNet automatically lists every investment offering that it receives, and applies analytics that it received patents for to assess its valuation, risk, and return, run peer comparisons, and assign an overall star rating for each. The investment purchases themselves take place offline, via wire transfers or checks.
Rather than charging one-time fees or a carry on profits, EquityNet works as a subscription service. Entrepreneurs pay at different monthly levels to use the platform’s business plan software (which populates their company’s fundraising listing), access its database of investors and angel groups, and receive personal business plan and funding assistance. Accredited investors who register on the site can search and browse the listings for free.
As of Monday, EquityNet sports a new design that features listed companies on the front page and lets anyone, not just people who register as accredited investors, search and sort the listings by numerous criteria such as star rating, page views, and closeness to funding goal.