Localstake

  • FoundedFebruary 2013
  • HeadquartersUnited States
  • FundingBetween $1 - $10 million
  • Sector-FocusSmall Business
  • Stage-FocusNot Applicable
  • SecuritiesRoyalty-Based

Snapshot

Localstake operates online, locally focused marketplaces that connect businesses looking for capital to local investors and community partners. Localstake’s tools for investors and businesses makes the capital raising process more efficient, engaging, and social.

Localstake was founded around the following five core principles:

  1. All individuals should be able to invest in private businesses
  2. Investors should invest in what they know best—their community
  3. Collaborative research and decision making results in better informed investors
  4. The process for raising capital should be efficient and inexpensive
  5. Local investors can offer many valuable advantages to small businesses

Deal Flow

Localstake facilitates investment in growing small businesses. It looks to work with businesses that meet the following criteria:

  • Growing businesses that are currently generating revenue, or close to it;
  • Looking for under $1,000,000 in funding;
  • Offer a product or service that investors can be consumers of or evangelists for; and
  • Can benefit from having investors from their community.

While Localstake’s platform can support multiple security types, for businesses that use its Pro fundraising plan it uses revenue-share securities.

Fee Structure

Investor Fees

There are no fees for investors to sign up. Investors pay a transaction fee when investing, currently in the amount of $25. If the offering they invest in is unsuccessful, this transaction fee is returned to the bank account they invested from, along with their entire investment amount. Transactions fees may be waived or discounted for promotional purposes.

Issuer Fees

There is no initial cost to sign up and apply for funding on Localstake. Localstake offers tiered plans to issuers who are accepted and choose to raise funding on the platform.

  • Application Fee $1,000 for Pro; $500 for Boost. (Paid after the business has been submitted, reviewed & approved.)
  • Success Fee A percentage fee contingent on the success of the offering. Varies by raise.

In total, LocalStake indicates fees will typically range between 5%-10% of the amount of funding raised.

Localstake also offers a Simple plan for businesses that do not fit its Pro or Boost raise plans. It allows them to manage their own raises and costs $99/month.

Executive Team

Ryan Flynn

Co-Founder

Prior to founding Localstake, Ryan worked in investment banking at Periculum Capital Company, LLC. At Periculum, Ryan worked with management teams of small to middle market companies to assist them in raising growth capital and selling their business. Ryan received his Bachelors of Science in Business Administration and Psychology from Washington and Lee University. He holds the Series 7, 24, 79, and 63 securities licenses.

Kevin Hitchen

Co-Founder

Prior to founding Localstake, Kevin worked in institutional investment management and due diligence at the Indiana Public Retirement System. He began his career at J.P. Morgan providing investment and wealth advisory solutions to individuals and families, many of whom were business owners or former business owners. Kevin received his Bachelors of Science in Finance from Butler University. He holds the Series 7, 24, 79, and 66 securities licenses and is a CFA charterholder.

Brandon Smith

Co-Founder

Prior to founding Localstake, Brandon was an investment analyst at J.P. Morgan in Private Banking. While there, he was responsible for investment analysis and risk monitoring for high net worth families, foundations, and business owners. Brandon attended Indiana University where he graduated from the Kelley School of Business, majoring in Finance and Entrepreneurship. He holds the Series 7, 24, 79, and 63 securities licenses and is a candidate for the Chartered Financial Analyst (CFA) designation, having passed all required exams.

Social

February 4, 2014

Today we launched the Localstake Marketplace! This means that our mission to bring local investment

November 23, 2013

Now that the Securities and Exchange Commission has proposed rules on crowdfunding, private compa

January 3, 2013

Crowdfunding Main Street is a five-part series that expresses my personal thoughts and research on the magnificent implications investment crowdfunding holds for small businesses, investors, and communities. Implications that can only be realized, howe …

© 2012 Open World Ventures LLC