530 Funds Pivots, Launches Crowdentials As Crowdfunding Compliance Solution

crowdentialsCrowdentials is a Cleveland-based company specializing in crowdfunding compliance, and the team is ready to launch their product as soon as equity crowdfunding regulations are finalized by the SEC.

Crowdentials sports the same team that brough 530 Funds to the crowdfunding world. 530 Funds launched last year as a searchable database of crowdfunding web sites. It didn’t take long for the team to find that they may have overestimated the need for just such a solution, and they began to rethink their place in the industry. It was time for a pivot.

richard rodmanThat realization led to the launch of Crowdentials. The team is now embedded in Cleveland’s FlashStarts, a software startup accelerator. FlashStarts is headed by Charles Stack, a serial entrepreneur that began mentoring startups after selling one of his companies, Flashline, to Oracle five years ago. He also launched Books.com in 1992, the first online book store–predating the now monolithic Amazon.com.

I had a chance to interview Richard Rodman about his team’s new product.

CFI: Crowdentials is the product of a bit of a pivot by 530 Funds. Tell me a bit about what led to that pivot and your newfound niche.

Rodman: We have been following the equiy crowdfunding space for some time. As a crowdfunding aggregate site (530funds.com) we were very aware of the surge of platforms taking place, and the level of compliance that all platforms have to adhere to. This led us to researching and becoming familiar with the history of securities laws in the United States and the way we go about compliance. Naturally, there was a gap in the market to provide regulatory compliance software for platforms, businesses, and investors in the equity crowdfunding space. This is something our team is passionate about; we are very excited to help these individuals comply with the rules set forth. These parties have the right to comply with regulations set forth, but they don’t have the right to be taken advantage of. This is why we created Crowdentials and why we strive to help all parties stay in compliance.

You’re currently embedded in the FlashStarts accelerator in Cleveland. What has that experience been like? How has it been working alongside an internet entrepreneur like Charles Stack?

It is fantastic. The program that Charles and Jen are running is a true entrepreneurs dream. They have done an amazing job of creating an environment where an entrepreneur such as myself can flourish and accelerate a company. Aside form the initial capital, we have access to 50 mentors and 25 interns. Most people would be overwhelmed with the level of support and access to bright and experienced minds provided, but to the Crowdentials team, it is a dream come true. As far as working alongside an accomplished entrepreneur such as Charles, it is the experience of a lifetime. A lot of people go throughout life communicating and connecting with individuals who are as accomplished or less accomplished than themselves. Working with someone as accomplished as Charles really pushes us to meet and exceed his expectations. Another great thing about Charles and the program is the level of feedback we receive. It is this feedback that is absolutely critical to the growth patters we are approaching. Charles has done this before. He has started a company from scratch, taken It through an accelerated growth period, and sold it. To us, his advice and recommendations carry weight and have helped us get to where we are today.

Crowdentials is focused on helping to ensure crowdfunding investors are complying with the JOBS Act. What are the challenges you face in accomplishing that goal?

The initial problem would be waiting for the SEC to finish making the rules. We are working on our API for platforms as we speak, but are limited to the extent to which we can build it. Luckily for us, all of our API is variable driven, and can adapt to rules set froth within minutes. Although this is a slight threat, our team has the willingness and ability to combat it by staying connected to the industry and working quickly and efficiently to implement any changes.

Of course, I have to ask… any chance Crowdentials crowdfunds itself down the road? 

Great question. We don’t know at this point. It all depends on when the regulations are released. We are working on raising a round of financing by the end of summer to continue working on Crowdentials full time, but may crowdfund after that. If there is one thing I will say – its that crowdfunding is an extremely viable way to raise capital and Crowdentials will explore all options available.