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CRCover Frequently Asked Questions

CRAdvisor

FAQ

What is CRCover and why do your offer it?

CRCover is a form of principal protection for the CrowdVestor. An asset backed assurance escrow able to repay the CrowdVestor in the event of a venture’s failure is a unique value in crowdfunding. Until now, unaccredited investors, averse to the risk of loss, had no assurance that their backing a product, service or cause would guarantee no loss of principal. Now CRCover offers that guarantee. Essentially, if the CrowdCo can’t pay back the principal invested via royalties, CRCover will.

How was CRCover created?

Asset-backed loans are not new. An asset-based loan is a loan, often for a short term, secured by a company's assets. Real estate, accounts receivable (A/R), inventory, and equipment are typical assets used to back the loan. The loan may be backed by a single category of assets or some combination of assets, for instance, a combination of A/R and equipment. Crowdfunding is new and the new types of ventures require a modification of current practices. CrowdCos: - Normally do not have track records of earnings to support normal bank loans nor the requirements of angel and venture capitalists - Have built up assets and/or inventory and/or product sales to cover funding needs - Have need for 6-18 months of development time before they can begin generating incomes stream. In this stringent capital market there is a need to help CrowdVestors: - Reduce and/or modify risk - Agree to a medium term payback period of 7 years - Enhance their portfolio with creative entities focused on rebuilding the market and providing employment. CrowdFund Roundup assets minimally mature to principal covered in 7 years and allow the CrowdVestor to hedge their investment with assurances for principal recovery. Once in place the concerns for potential loss of principal are removed from the investment decision.

Who really pays for this assurance product?
The CrowdVestor gains the value of principal protection therefore he alone pays the premium. It is the same with every product or service you buy and that includes the investments you make. Premiums are wrapped into the pricing of your royalty loan unit by providing you with an effective yield that varies with the amount of CRCover protection desired.

Why would the CrowdVestor buy CRCover?
CrowdVestors want to invest in great ideas. They just need a structured approach. Not comfortable with the risk of other types of investing in great ideas, they embrace a portfolio choice that advances their desire to see a great idea realized while still providing a generous ROI. . CRCover takes these concepts down to the individual lending agreement helping the CrowdCo and CrowdVestor come together and execute dynamically. Benefits include:
- Reduction of overall risk - Better control of assets balances over time - Ability to take on interesting projects that would normally need to be avoided.
CRCover is a way to allow more people, with more money to fund the ideas they desire without fear of loss. This leads to increasing funding, social proof and continuing revenue of great ideas from CrowdCos.

Is this like the government loan guarantees we see for SBA loans, etc.?
Yes, and no. Yes - the principal coverage process is similar. No - unlike the government that can write paper money, CRCover is backed by real assets to cover its obligations for assurance. A better comparison would be the processes of a warranty or insurance company.

Why does CRCover require CRMonitor?
Repayment assurance comes with a cost to continually manage the CrowdVestor’s funding. For many CrowdCos who have tried banks, VCS, Angels and even their friends or family, our CRRoyalty program makes sense and they are more than willing to allow us to monitor their progress if it gets CrowdVestors interested in their financing needs. If you do what it takes to be successful there should be no problem with monitoring your progress and this helps assure the CrowdVestors.

What does it mean my funds raised will be tranched?
Investments or loans are typically disbursed through one or more stages. These staged disbursements may correspond with specific business activities, revenue growth milestones, working capital requirements, or other special events or achievements. CRRoyalty uses a third party, Escrow.com, to control these tranched funds. For CRRoyalty programs requiring development time, tranching is a documented contractual agreement with the CrowdVestor, and is considered a requirement. The development milestones are managed by our CRMonitor process to provide CrowdVestors with the best control over their money.
Download ALL CRCover FAQs here --- Download a complete set of FAQs for ALL CRProducts here

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