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Vocal's Path Forward: Pioneering Change with Reg CF

The Rise of Regulation Crowdfunding as a Remedy for Small and Microcap Companies in the Wake of Economic Crises

By Jeremy FrommerPublished 10 months ago 4 min read
Top Story - July 2023

As we have successfully navigated the past seven-year economic cycle and overcome challenges associated with these transitional times, I am excited to begin the next chapter for Vocal, Creatd's flagship product and homebase to millions of creators.

I stay focused on leveraging the strategic solutions we have created to address the systemic breakdowns that have long plagued these sectors. I have been sharing these ideas with a number of the CEOs I communicate with regularly and writing about them on Vocal.

The overall financing in the public markets for various reasons created a testing environment for companies because the big investors' lending structures were detrimental to common retail shareholders.

We now have the opportunity to eliminate the intermediaries that have long acted against the interests of those shareholders. By eliminating the middleman we can go directly to the millions of people who are the engines of Vocal’s success and already value being a part of our broader community.

The financial landscape of the small and microcap markets has been influenced by several factors, including the end of the 2008 mortgage-related financial crisis and subsequent government liquidity injections. This influx of cash led to increased valuations and inflated a small bubble. The Covid economic crisis, and its cash bailout further exacerbated the situation, creating inflationary bubbles that impacted various market sectors, including cryptocurrencies and NFTs, pushing off our Web 3.0 visions for another decade.

As the cash euphoria created by the Covid crisis waned, publicly traded entrepreneurial companies faced a new reality: the end of easy money. This shift left behind a toxic environment characterized by overwhelming selling, abusive trading practices, and market makers not following the laws, leading to drastic drops in stock values reminiscent of the 1929 crash and the subsequent Great Depression. The consequences were devastating for retail investors then and now, while benefiting a select few financial barons — hedge fund supremos and institutional players like Goldman Sachs and Citadel.

To pull clear from the chaos, companies in the small and microcap markets are rapidly turning to Regulation Crowdfunding (Reg CF). Historically, raising capital for companies was confined to accredited investors—typically the top 2% wealthiest Americans. However, in 2012, a shift occurred with the signing of The JOBS Act by President Obama. This law permitted entrepreneurs to publicly advertise their quest for pre-IPO investors. By 2016, a new exemption, Regulation CF, came into effect, which expanded the pool of potential investors for early-stage companies to include all Americans. Equity crowdfunding is now a mechanism for companies like Vocal to leverage turning its network into investors. This approach aligns perfectly with our mission to democratize investment and deepen community engagement.

Reg CF emerges as a ray of hope for these companies, providing a promising alternative to conventional financing. By raising capital through Reg CF, companies can bypass the exploitative deals and practices that have tortured management teams for far too long.

This approach to funding empowers everyday investors from the vast network of Creatd and the Vocal platform, fostering a sense of ownership and community support. We welcome the opportunity for the first time to offer Vocal’s community of creators direct participation in the revenues of the company. These creators believe in the platform, they support each other, they want the platform to grow and flourish. This is a healthy, positive business model, built on real success and not on gaming a broken market.

For companies like Creatd ($VOCL), navigating the challenges and pressures of the market has been a daunting task. The allure of convertible bonds with warrants attached seemed like the only viable option for raising capital, but in the end it came at an unforeseen cost to shareholders. As we refused to bow to the demands of a reverse split and common stock financing, we realized the need for a more progressive and sustainable approach that did not include dilution to shareholders.

Our answer lies in Reg CF — a strategic alternative to escape the implosion of the microcap public market space. By raising up to $5 million in capital through a Reg CF campaign, we plan to improving the company's financial position and long-term viability. This move will create a catalyst for upward momentum in our common stock $VOCL. This will allow us to focus on growing revenues for our flagship product, Vocal, and to continue to leverage its position in the creator economy.

Reg CF provides several advantages for companies seeking financing. It serves as a litmus test, validating the company's business model and enhancing its credibility. By avoiding immediate dilution for existing shareholders and reducing vulnerability to short sellers, companies can safeguard their long-term growth prospects.

As we prepare to announce our Reg CF campaign formally, we are excited about the opportunities it presents. Reg CF emerges as a probable answer for the small and microcap markets, providing a level playing field for all stakeholders involved. It empowers us to chart a sustainable path forward and secure the support of our passionate community and new investors alike.

Follow me on X (AKA Twitter) to keep updated. Share your thoughts and comments below.


About the Creator

Jeremy Frommer

Chairman & Co-Founder of Creatd ($CRTD) and Vocal. We have much work to do together.

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Comments (17)

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  • Justine Crowley6 months ago

    Hello Jeremy, I also needed to ask as to what is happening with the investor badges on writers profiles, that was promised regardless of tier, for all writers who chose to invest in Vocal Media's Reg CF offer? I did not invest solely for a reason, yet it is a badge of appreciation in a way. Thank you so much.

  • Hi we are featuring your excellent Top Story in our Community Adventure Thread in The Vocal Social Society on Facebook and would love for you to join us there

  • Thavien Yliaster9 months ago

    Jeremy Frommer, are there now two separate ways to invest into the company Creatd Inc.? Is there a private way to invest along with publicly? How would investing privately in shares of the company help the actual publicly traded common stock, VOCL? Does this mean that people who already own the VOCL common stock will not be capable of receiving the dividends that were previously mentioned, such as the O.G. Collection Inc. and Creatd Ventures?

  • Vocal provides us with an outlet for creative expression that can give people more than just a place to express themselves, but rather a place to explore and unite one another in a quest to deliver something raw, unique and powerful. Thanks for the article. You may also enjoy the following story: Thanks for your thoughts.

  • ARC10 months ago

    Appreciate the clarity and accessibility of this article. As both a Vocal writer and an entrepreneur, my partner and I have been sincerely looking at CF as a funding option and this article helped provide some large-scale context of where CF sits in the overall conversation. 'Regulatory' CF was a new term to me (prior to reading), so thank you for the new rabbit hole! On the Vocal side of things (the content of your article): This excites me. (1) Vocal is 'one of the good guys' in the land of tech. We need more tech companies to follow your humanistic, sustainable example. Overcome the 'bad guys' of tech simply by making them irrelevant because all the users have moved to non-toxic platforms like Vocal. (2) Banks and toxic capitalism as a whole (repeat, adding emphasis: TOXIC capitalism. Not capitalism in general) are the root of our world's current imbalance and dis-ease. Vocal becoming a proof-positive example of a good company becoming successful via another stream of revenue other than toxic funding will be a huge win for humanity (even the humans who don't realize this is the case) and a large step toward a more conscious marketplace. Thanks for all you and the Vocal team are doing, Jeremy. One Vocal creator here who sees all the work it takes to do what you are doing and thinks you're doing a phenomenal job. Rooting hard and looking forward to supporting the RCF campaign.

  • If this leads to Vocal employing enough people that they can make sure there are humans to read every story posted, and recommend a story for top story if the human reading it thinks it might be deserving, it might be a good thing.

  • Thavien Yliaster10 months ago

    Okay, I have some thoughts on this. Some, if not most of them, I will have no idea what I'm talking about. So, please bear with me as I continue to reply to myself in hopes that the message will not be deleted.

  • Babs Iverson10 months ago

    Interesting & exciting!!!❤️❤️💕

  • Ashley Lima10 months ago

    Gonna be honest, don't know what much of this means. Perhaps in a future article, you could highlight what we can do as creators to support Vocal in layman's terms. Regardless, I'm optimistic for the future of this platform. Vocal has given me the opportunity to share my craft and be rewarded for my voice, that's irreplaceable. No other social media platform, particularly writing-related, has done that for me.

  • Congrats on yur top story. Look forward to watching this unfold

  • Erica Wagner10 months ago

    I'm on the Board of Creatd, and some of you may know me as a creator, too. I am wholeheartedly excited about this new path because I think Vocal is such a great and supportive platform.

  • Cendrine Marrouat10 months ago

    I look forward to seeing where the journey leads. :-)

  • Amanda Starks10 months ago

    "We welcome the opportunity for the first time to offer Vocal’s community of creators direct participation in the revenues of the company. These creators believe in the platform, they support each other, they want the platform to grow and flourish. This is a healthy, positive business model, built on real success and not on gaming a broken market." I've been a part of the vocal family since 2018, and I still consider it to be one of the best decisions I ever made. You and the entire Vocal team truly feel like a one-of-a-kind company that has a real chance of providing the support creators need, and the idea of involving us further in the future of the company is feels like a warm hug? Maybe that's too corny, lol. Thank you, thank you, from the bottom of my creative soul. Here's to many more years of passion, creativity, and booming business!

  • Gerald Holmes10 months ago

    I am interested to see where we go with this. I like your idea and feel it is the right path forward.

  • Congratulations on your Top Story🎉🎉

  • Judey Kalchik 10 months ago

    Now following you on X (formerly Twitter), and read through the last few weeks of Tweets. I can see you have a firm plan forward, and as a two-year Vocal Creator I am curious and optimistic about investing in the platform. Ready to hear more.

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