What is 40Billion.com?

40Billion.com is the social funding network for entrepreneurs, where members can leverage their social networks to raise capital for a business, fund a business, or find resources to build a business. Our management team has tons of real-world finance and entrepreneurship experience. We’re concerned about the $40 billion gap in startup business funding, so we created an Internet-based platform and online tools to facilitate increased business funding by allowing entrepreneurs to raise money from people they know and trust – i.e., their social network of family and friends. We are also a Delaware corporation, headquartered in Georgia. For more information, see About 40Billion.com.

How does this work?

It’s easy. Our platform helps entrepreneurs raise capital for their businesses from friends, family and other individuals in their social network. First, entrepreneurs fill out their online business profile, describing themselves and providing insight into their business goals and funding needs. Then they invite potential funders - the people in their network - to participate by giving, contributing, or lending money to build their dream business (sorry, no equity investments yet). A funder may offer $25 - $10,000 (for gifts/donations, and direct loans) or $100 - $1,000,000 (for commercial paper) towards the target. 40Billion.com facilitates the process so that it's simpler, generates a custom promissory note (for direct loans and commercial paper) so that the agreement is in writing, and enables entrepreneurs and funders to track and manage their activity more easily. We handle the details and simplify everything. For more information, see How It Works.

What are the terms and fees?

Anyone who views a Raise may offer funding, as a gift/contribution or loan towards the business. Funding can be provided in various increments up to the funding target, but the entrepreneur sets the funding target. 40Billion.com does not facilitate equity investments or sales of stock or shares of companies at this time.

For gifts/contributions, 40Billion.com allows funds to be collected by the entrepreneur either through PayPal online payments or by mail. The funds can be deposited directly into a PayPal account designated by the entrepreneur, or checks can be mailed from funders directly to the business' address. It's FREE for a limited time to start a Raise for gifts and donations, and after the first month there is a small extension fee of $9.99 per month if the entrepreneur wishes to extend the Raise for up to six more months. Additional PayPal fees may apply.

For direct loans, 40Billion.com makes it easy for entrepreneurs (i.e., borrowers) and funders (i.e., lenders) to formalize a business loan between friends or family members by generating a custom loan document (a.k.a., promissory note or loan agreement) that defines the terms of the loan. Each borrower and lender can view the loan document, print it, sign it, and decide how they would like to transfer the funds offline (e.g., via mailed check or in-person). It's FREE for a limited time to start a Raise for direct loans, and after the first month there is a small extension fee of $9.99 per month if the entrepreneur wishes to extend the Raise for up to six more months.

For commercial paper (i.e., short-term loans for operating expenses only), 40Billion.com makes it easy for entrepreneurs (i.e., borrowers) and funders (i.e., lenders) to sell and purchase commercial paper promissory notes. Each borrower and lender can view the promissory note and print it, but only the borrower is required to sign it (and optionally have it notarized by a Notary Public). Both parties decide how they would like to transfer the funds offline (e.g., via mailed check or in-person). It's FREE for a limited time to start a Raise for commercial paper, and after the first month there is a small extension fee of $49.99 per month if the entrepreneur wishes to extend the Raise for up to six more months.

How can it work for me if I have no family and friends?

You might think that you do not know people who have the money and want to help you, but surely you do. Think of people beyond your personal family and friends: friends of family, friends of friends, relatives of friends, co-workers, neighbors, church community, or anybody that thinks highly of you and your abilities. They want you to succeed in your business, and they might help you because they think highly of you or want to be involved in something new and exciting.

It’s easy. Our platform helps you raise money and find resources for your business from friends, family and other individuals in your social network. First, you start a Raise by filling out your business profile. Then you invite potential funders - the people in your network - to participate and provide funding towards your target. 40Billion.com simply facilitates the process, making it quick and easy to help you raise the funds. We handle the details and simplify the process of managing multiple funders.

40Billion.com combines the power of microfunding - helping individuals raise money through multiple relatively small transactions - with social networking via the Internet.

Who is eligible to raise money?

To raise money on 40Billion.com, all you need is an idea for a US-based business, whether you are an experienced entrepreneur or just starting out. You must be at least 18 years old with a valid US address. We recommend that you form a company, particularly for commercial paper Raises, or at least consult a competent attorney in order to understand the risks of operating as an unincorporated business.

Who is eligible to fund a Raise?

For private Raises: Anyone who is invited by a current member, whether an entrepreneur raising money or an invited member (e.g., a funder). Raises for direct loans are always set as private only, but Raises for gifts/donations and commercial paper may be set as "private" by the entrepreneur. Because 40Billion.com facilitates private funding networks, each funder must be invited by someone they know who is a member of the Raise. Once you’re invited, you can provide funding. You must be at least 18 years old with a valid US address.

For public Raises: Any current member may fund a public Raise, and only Raises for gifts/donations and commercial paper may be set for public viewing and funding (i.e., the entrepreneur decides whether the Raise is public or private). You must be at least 18 years old with a valid US address.

Are you pulling a credit report when I raise money or fund a Raise?

No. We do not request your social security number, and we do not check your credit report. Your credit is none of our business (pun intended).

In lieu of a personal credit score, we have developed a proprietary method for assessing business ventures called the Social Business Rating System or SBRS score. It generates a score for each Raise based on 17 criteria, including business-related success measures, entrepreneur profile, peer ratings, and reviews. The SBRS score helps funders and entrepreneurs to compare business ventures and assess their potential likelihood of success. 850 is the highest possible SBRS score.

What are the minimum and maximum amounts of money I can raise or fund?

For gifts/contributions and direct loans, the minimum funding target is $1,000, and the maximum funding target is $99,000. That means you, the entrepreneur, can set a funding target of as little as $1,000 or as much as $99,000 for your business. This should be enough for you to get started on your business, and you can start a new Raise whenever you need additional funding or even start multiple Raises at the same time. A funder may offer as little as $25 or as much as $10,000 in a single transaction.

For commercial paper, the minimum funding target is $5,000, and the maximum funding target is $1,000,000. That means you, the entrepreneur, can set a funding target of as little as $5,000 or as much as $1,000,000 depending on the working capital needs of the business. This should be enough for you to cover short-term operating expenses, and you can start a new Raise whenever you need additional funding or even start multiple Raises at the same time. A funder may offer as little as $100 or as much as $1,000,000 in a single transaction.

When will the funds be sent to me?

For gifts/contributions, 40Billion.com enables funds to be collected by the entrepreneur either through PayPal online payments or by mail. The funds can be deposited directly to a PayPal account designated by the entrepreneur, or checks can be mailed from funders directly to the business' address.

For direct loans and commercial paper, the entrepreneur and funder decide how they would like to transfer the funds offline (e.g., via mailed check or in-person).

Will I know the identity of funders?

Yes. The entrepreneur is able to view the names and contact information of the people who fund their Raises. Click the "funders" link on your Raise profile page in order to view the list of funders for your Raise. You can also view the list of people who were invited to participate in your Raise by clicking the "invitations" link on your Raise profile page.

Who are potential friends-and-family funders?

1. People you know directly. You probably know hundreds of people, and each person is a potential funder. This includes parents, aunts, uncles, brothers, sisters, cousins, alumni, classmates, business associates, coworkers, church members, club members, in-laws, babysitters, accountants, attorneys, bank tellers, customers, etc.
2. People in your extended network. This includes friends of relatives, friends of friends, relatives of friends, etc. You might not know these people directly, but you can be introduced by someone that you do know.

How do I ask friends & family and others in my network for funding?

• Be confident
• Talk about your business and the opportunity in a conversational way
• Ask for business advice, initially, not for money
• Ask them to be a "silent partner" if they want to come along for the ride
• Have your elevator pitch and your business plan summary ready
• Ask them to recommend people who have experience in your industry and who can help you by joining your Board of Advisors
• Follow up with multiple phone calls, lunches/coffees, and presentations EVERY DAY

How much is raised through friends & family?

• Entrepreneurs should be able to raise up to $100,000 at the friends & family level.
• Twice as much money is raised at the friends & family level (seed round) than at the angel level every year in the US - according to the University of New Hampshire. Over $100 billion in friends and family business funding is transacted each year in the US - according to the Global Entrepreneurship Monitor.

Why raise funding through friends & family?

• Get the initial money you need faster and with fewer restrictions. Use the money to get started before launch, forming your company, paying your salary for the first year, patenting your technology, developing and testing your product or service, etc.
• Get practice and experience raising money. This experience will help you later when you need to raise more money through angels, VCs, or banks.
• Get feedback and encouragement from people you know. Your friends & family will be your biggest cheerleaders and may even become your first customers!

How many friends & family do I need to contact?

• As many as possible! Every additional contact will increase your chances of success.
• On average, you can expect only 1 out of every 15-20 people will provide funding. So, if you contact 100 people, you may get 5-7 actual funders; if you contact 300 people, you may get 15-20 funders.

What is Commercial Paper?

The Commercial Paper note is simply an unsecured promissory note (an IOU), with a maturity of less than nine months, to fund operating expenses or current assets. It is widely used in the commercial market by corporations to meet short-term liquidity needs.

What is the purpose of Commercial Paper?

It is issued to investors who have temporary idle cash and who want to earn a decent return (income). On 40Billion.com, it is one way that funders can help out small-business entrepreneurs with short-term cash needs.

How is Commercial Paper used in business?

By law, Commercial Paper can be used to fund only operating expenses or current assets (i.e., short-term assets such as inventory, payroll or other short-term cash needs). It is not to be used for financing fixed assets such as land, buildings or machinery.

Is Commercial Paper a legal product?

Yes. Commercial Paper is legal. The transaction between the issuer (e.g., entrepreneur or borrower) and buyer (e.g., funder, investor, or lender) and the contents of the Note are governed by U.C.C. (Uniform Commercial Code) Articles 3 and 4. In various states of revision, articles 3 and 4 of the U.C.C. have been adopted by all 50 States in the U.S.A. The first Commercial Paper was issued in the U.S.A by Goldman Sachs in 1869.

What is the maturity of Commercial Paper?

Commercial Paper can be used for a wide range of maturity that is less than nine months (i.e., minimum of 1 day and maximum of 270 days).

What are the advantages of Commercial Paper?

1. It is a quick and cost-effective way of raising working capital that is typically cheaper than a bank loan or line-of-credit.
2. Good borrowers (e.g., those with high SBRS scores on 40Billion.com) may get a lower discount/interest rate from investors and reduce the cost of funding.
3. It is unsecured, and therefore does not create any liens on assets of the company.
4. It has a wide range of maturity (up to 270 days), which provides more flexibility.
5. It is exempt from federal SEC and State securities registration requirements.

How does the Commercial Paper process work?

Commercial Paper is offered at a discount (less than the face value). For example, a Commercial Paper note with a value of $100 may be issued (or sold) to a buyer at a discounted price of $97. This means that the issuer (i.e., borrower or entrepreneur) would pay $100 to the buyer (i.e., lender or funder) at maturity. There is no other finance charge, and the discounted price or discount rate is negotiated directly between the issuer and the buyer. 40Billion.com provides the promissory note document necessary for each issuer and buyer to execute the loan transaction with a formal agreement.