CrowdCheck investigates online securities offerings to help ensure they are legitimate, transparent, and compliant with the law. These investment opportunities might be early-stage companies, real estate projects or private investment funds. They might be offered to only "accredited investors" under the SEC's Rule 506. Or they might be offered to everyone under the new crowdfunding regulations. We do "due diligence" on all these investments.
We do this not only to help protect investors, but also to protect the issuers or sponsors of investment opportunities and the online investment platforms they list on.
Our trained analysts walk companies or sponsors through the diligence and disclosure process so that they can be certain that they have provided all the information they need to in order to avoid trouble down the road. They can also be sure that they have all the necessary corporate paperwork in order. The result of our due diligence process is published in our easy-to-read Report, which appears on the website of the online investment platform.
Our one-on-one human touch process goes beyond what databases alone can do and makes certain that the investment opportunity is valid and legally binding. It also helps issuers and investors – even those who are totally inexperienced – come to a meeting of the minds and so that the investor can make an informed investment decision.
In addition to specialized Checks for real estate projects and private investment funds, we offer different levels of Check for operating companies:
Compliance Check/Core Check
The CrowdCheck Compliance Check satisfies all of the legal requirements for a company seeking investment under the SEC’s new “Regulation Crowdfunding”. The CrowdCheck Core Check is tailored to offerings being made to accredited investors under the SEC's Rule 506.
The Compliance Check provides the company and the investment platform it lists on with complete assurance that the company is complying with all the SEC's disclosure and procedural requirements.
Some of the things we look at in the Compliance Check are:
- Whether the company meets the disclosure requirements set out by law and regulation
- Whether the company meets the SEC's requirements for securityholder records (for offerings under "Regulation Crowdfunding")
- The backgrounds of the people who control the company
- Whether the company is properly established and in good standing
- Whether the company is legally able to issue the securities it is offering
- And more…
CrowdCheck Foundation Check
The CrowdCheck Foundation Check builds on the Compliance or Core Check, and is a cost-effective way for companies to stand out from the crowd. In addition to the information provided by the Compliance Check, the Foundation Check provides in-depth insight into the company’s operations, structure, and key employees.
The Foundation Check is ideal for platforms looking to provide companies and investors with a robust and efficient due diligence solution, establish that the platform has made a reasonable investigation into the company and its management in accordance with FINRA requirements, and lay the foundation for a “due diligence” defense. The Foundation Check is the level of investigation that CrowdCheck’s principals would do if we were investing our own money in a smaller offering.
Some of what we review in the Foundation Check is:
- Everything in the Compliance Check
- The company’s key employees and their backgrounds
- Whether the company has all the required licenses to conduct business
- The company’s customers and suppliers
- The company’s premises and the terms of its occupancy
- How the company’s plans might affect investors’ “exit” from the investment
- And more…
CrowdCheck Verified Check
The Verified Check is our most expansive review. Not only does it include all of the information covered by the Compliance/Core and Foundation Checks, but we also work with the company to help it ensure that any material statements it makes in its offering materials, such as a Private Placement Memorandum, Offering Circular, slide deck or video, are backed up by evidence.
The Verified Check is the check for companies or platforms that want to go the extra mile and provide their investors and themselves with maximum transparency and protection.Request a sample CrowdCheck Report
CrowdCheck Specialty Checks
The Realty Check for Rule 506 real estate investment offerings complements the real-estate specific diligence that intermediaries experienced in real estate perform on their own. The Realty Check establishes the legitimacy of the developer or project sponsor, the people behind the developer, and any investment vehicles issuing securities to investors. In many real estate offerings being made under Rule 506 there are three entities involves, two of which are issuing securities: the entity that actually owns the real estate and an intermediary vehicle formed to invest in the entity that owns the real estate. The Realty Check looks at the internal corporate compliance (and thus the ability to issue securities) of both entities.
The Fund Check by CrowdCheck for offerings under Rule 506 establishes the legitimacy of the fund manager and investment vehicle seeking investors. The Check goes further and addresses some of the basic corporate governance of the fund to confirm whether the necessary procedures set out in the fund's governance documents have been complied with, including establishing relationships with accounting firms and third-party administration services.Request a sample CrowdCheck Report