Investing in Pickleball - Equity Crowdfuding Option

Pickleball Investing

Pickleball as a sport is booming.  Many people are playing and a subset of these players are investing or looking to invest in the sport.  Starting a new pickleball paddle or gear brand is not unlike any other start-up.  You need capital, connections and a bunch of risk-tolerant guts.  New pickleball brands will require significant capital to launch and like all start-ups, raising capital is a full time job.  You need to define your company's valuation and then woo investors to take a chance on your ability to grow / scale the business.

Another great was to organize investors is through a Reg CF offering.  Learn more below.  Pickleball Superstore and PowerPlay Pickleball are two companies raising capital using the Reg CF framework.

What is a Reg CF Investment Offering

Regulation Crowdfunding (Reg CF) is a section of the United States Code of Federal Regulations that allows eligible companies to sell securities through crowdfunding. It was established by the 2012 JOBS Act and went into effect in 2016, with amendments in 2020 that became law in 2021. Reg CF is designed to help small businesses and startups raise capital from both accredited and non-accredited investors. It provides an exemption from registration requirements with the SEC, allowing companies to offer up to $5 million in securities without registering.

Reg CF transactions must take place online through an SEC-registered intermediary, such as a broker-dealer or funding portal. Some examples of funding portals include SeedInvest and Wefunder.

Many of the "crowdfunding" platforms online are not SEC-registered intermediaries.  Meaning, they can't offer equity (shares or units) in the company, rather they can offer free or discounted products, swag items, etc.  

Reg CF Investment Benefits

• Democratizing investment access: Allows the general public to participate in early capital raising activities for startups and early-stage businesses
• Fostering community engagement
• Supporting job creation
• Contributing to economic growth

 Community Funding with Equity

The SEC website has a lot of great information including rules, guidelines, etc.  This might be more detailed than you'd like, however it's always good to know what the regulations are, especially when venturing into this arena.

Regulation Crowdfunding enables eligible companies to offer and sell securities through crowdfunding. The rules:

• require all transactions under Regulation Crowdfunding to take place online through an SEC-registered intermediary, either a broker-dealer or a funding portal
• permit a company to raise a maximum aggregate amount of $5 million through crowdfunding offerings in a 12-month period
• limit the amount individual non-accredited investors can invest across all crowdfunding offerings in a 12-month period and
• require disclosure of information in filings with the Commission and to investors and the intermediary facilitating the offering

Securities purchased in a crowdfunding transaction generally cannot be resold for one year. Regulation Crowdfunding offerings are subject to "bad actor" disqualification provisions.