1. What is SparkMarket?
SparkMarket is a technology provider that outfits businesses located in certain States (currently Georgia and Tennessee) with the tools necessary to build and run a compliant “intrastate capital raise” by means of a small public offering of debt, equity or convertible debt.
SparkMarket is a SaaS technology solutions provider, and is not a registered broker/dealer, or investment adviser, and does not solicit for the offer or sale of securities for any person, or make any recommendations with respect to investments.
2. What does SparkMarket do?
In short, SparkMarket provides the following services:
- We help determine whether a business is eligible under State and Federal securities laws to use an “intrastate exemption” to conduct a capital raise.
- We recommend deal terms for businesses to consider when forming a campaign (which you are not obligated to formalize into your actual deal terms).
- We provide technology tools to allow you to safely and compliantly advertise your offering through your own website, social media profile or email campaign.
- We ensure that only intrastate-qualified investors can view and ultimately invest in your offering.
- We take care of legal documentation.
- We provide closing services.
- We calculate and facilitate repayment to lenders, if needed.
To get started, tell us more about your business and your funding needs or schedule a one-on-one consult with a SparkMarket Campaign Manager, who will work with you to design a personalized campaign based on your funding needs. You can then “share” access to your campaign via a customizable widget, which can be embedded into your website and/or social media profile, to legally advertise the investment offering to your local network. Our technology also provides screening for investor eligibility and allows eligible persons to invest in the deal.
3. What is an “Intrastate Exemption?”
By law, all investment securities (whether equity or debt based) offered by businesses for sale in the United States must be either “registered” or “exempt from registration.” Registering public offerings of securities can be time consuming and extremely expensive, and are generally inappropriate for most small and medium sized businesses. However, exempt offerings generally cannot be made publicly (that is, offered and sold to persons who do not have a pre-existing relationship with the business). If a business keeps its offers and sale to persons only within its home State, however, it is generally exempt from federal registration, and, in certain States, is exempt from State registration as well.
4. Is the Intrastate Exemption like Crowdfunding?
It can be, but does not have to be used in this way. “Crowdfunding” is a general term that means many different things to different people, and in different industries. It is commonly understood to mean offering something of value to the public at large for its support in a project. The Intrastate Exemption is just a way of facilitating limited public offerings of securities by businesses in their home State. That offering may be to the public at large, or it may be limited to select persons, or persons belonging to a select group (such as an existing customer base or affinity group).
SparkMarket’s technology provides the tools to complete an Intrastate offering of securities. Whether the business chooses to characterize its Campaign as “crowdfunding” is an individual choice.
5. What is a “Spark?”
If a business chooses to “Spark” its offering, it creates a business milestone that it will work to achieve over the course of the loan term. The goal may be anything that works for that business such as a specified increase in revenue, profit, customers or asset value; or any other metric that makes sense for that business.
If the business reaches its Spark goal, it spreads a portion of the financial value of such milestone to its backers, who receive a bonus return in addition to the loan’s original return amount. In this way, backers are financially incentivized to support the business’s initiatives, through frequent patronage, referrals, and generally serving as ambassadors to the community, and rewarded for taking an early risk on a venture that turns out to be a success. Businesses are encouraged to be creative with their Spark, and use this additional incentive to keep backers excited about supporting the business over the course of the financial relationship and beyond.