Snapwire, a photo startup that allows brands to crowdsource photos for their social and marketing needs, announced that is had successfully filed and launched a Reg CF / Title III equity crowdfunding campaign under new rules provided by The JOBS Act that went into effect in May. The offer is live on StartEngine now but an interesting fact is that Snapwire did 2X Testing the Waters )TTW) campaigns under Reg A+. The first TTW went live on SeedInvest and the second was posted on StartEngine. On one the the TTWs, SnapWire generated over $13 million in indicated interest. Now indications of interest are not binding and the experience from other campaigns is that typically less than half of that number will still around but still that was a decent showing of investor intent. In the end, Snapwire made the decision to go with Reg CF. The justification came down to one big issue: cost.
According to a release, Snapwire explained;
“As good as the new deregulation is for small businesses, it can still be expensive for a startup, costing up to $100,000. Furthermore, companies still need to go through standard SEC filing requirements, which can be a three-to-four-month process. Snapwire initially began working with SeedInvest last year to see if there would be public interest in Snapwire.”
Under Title IV or Reg A+, an issuer may raise up to $50 million from both accredited and non-accredited investors. But for smaller issuers, Snapwire makes a valid point -Reg CF may make sense for smaller amounts. Both Reg CF and Reg A+ may allow a smaller firm avoid some of the perils of working with a VC that may be more interested in an exit instead of building for the long term.
Snapwire is an interesting service for photos / imagery. Most stock photo services suck and are expensive. Even the most prominent ones (no names mentioned) are not worth the toll. In fact, this is an interesting intersection of technology and creativity disrupting a pretty sleepy business. Snapwire’s user base has grown to more than 285,000 photographers with 14,000 registered buyers. When you really need a specific image, Snapwire may be the site to find it.
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