Nearly daily we have seen news of cryptocurrencies and crowdfunding, with startup founders using blockchain technology to run their software or foregoing venture funding for tokens with assigned equity.
The ability to scale and raise money in new ways is top-of-mind for entrepreneurs around the world.
The U.S. federal government, from the Internal Revenue Service to the Securities and Exchange Commission, is struggling to keep up and create guidelines for people investing in or selling cryptocurrencies.
To navigate these waters alone would be foolish. Based in Washington, D.C., Attorney Maureen Murat, Esq. stays on top of the many laws startup founders need to know about cryptocurrencies, blockchain and national and international regulations.
Licensed to practice law in New York and Florida, Murat co-founded Crowdie Advisors with Samson Williams, a finance strategist who specializes in operations and technology. Murat is also an adjunct professor at University of New Hampshire School of Law, an attorney-advisor at the U.S. Department of Insurance, Securities and Banking (DISB) in D.C., and a sought-after speaker who has been quoted internationally over the past few years.
Together with Williams, they co-authored “Raising Money Workbook – How to use the JOBS Act to Raise Up To $1M.” In the workbook, they walk founders through exercises to help them run a successful and legal crowdfunding campaign.
Often the only Black professional speaking at crypto, blockchain and crowdfunding events, Murat says she wants white male counterparts in the space to “scoot over.”
“There’s room for some other people at this table,” Murat told Moguldom.
Murat spoke with Moguldom about how Black tech founders can do better raising money, what they should avoid, and her thoughts on how the U.S. is doing in its attempt to regulate cryptocurrencies and fundraising through ICOs.
Moguldom: You are one of the more popular attorneys in blockchain and cryptocurrency. How did you end up in blockchain?
Maureen Murat: It was not something that was on my radar. None of my friends told me about it, nor did I see it in the news. Someone had introduced me to equity crowdfunding. The law was coming down under the Obama administration back in 2016 and I was supposed to start on this startup that did not quite work out. So I decided to kind of go out on my own to learn more and find customers who wanted to raise money with equity crowdfunding. In my research, I came across people who were talking about crypto and initial coin offerings instead of crowdfunding, which is heavily regulated. Blockchain kind of fell in my lap.
Moguldom: You’ve been able to speak and have access to different ecosystems around the world. Is the U.S. government taking a conservative approach to cryptocurrency or being more aggressive than other countries?
Maureen Murat: I think the U.S. is taking a more conservative approach to the point they are falling behind in certain respects. I think part of the issues that we have in the U.S. that other countries might not have is the level of bureaucracy we have to go through to get a rinky-dink law passed, let alone something as massive as cryptocurrency. I think that is impacting how we move forward and keep up with some of the countries who traditionally have been behind us, and now have surpassed us in the financial realm, when it comes to crypto. The U.S. has some ways to go so people are not confused. With the SEC, there is still some gray area. I mean, if you are creating this guideline for people to be able to follow, then create a guideline that makes sense. People walked away with more questions after some of their recent work than before they released their framework.
Moguldom: What do you think is one of the most complicated parts of crowdfunding and ICO fundraising that Black tech startup founders do not think about?
Maureen Murat: When fundraising, people tend to offer more than they can provide. There is a slim gray line between puffery and total exaggeration and misrepresentation that could get you sued. For example, when founders claim they are going to cure a disease, or everybody who works with me is going to get rich, or you’re going to 10x every day for 10 years, this is the type of stuff that will get you in trouble. With crypto, the monetary value is so volatile. It goes up and down 24/7. There is little guarantee and a lot of risks. To try and promise exaggerated things, knowing the amount of risk involved is not right and can get you in trouble.
Moguldom: You co-authored, “Raising Money, Workbook – How to use the JOBS Act to Raise Up To $1M” with Samson Williams. Why should founders get this workbook?
Maureen Murat: We touch on understanding cryptocurrencies, as well and blockchain and how you can use crypto to raise money. But the main goal of the workbook is to remind you that even though you are raising, and raising money takes a lot of work, you are still running a business. The whole goal is for you to run this business and scale this business you are building.
Within the workbook, there are parts where you have exercises to complete. My favorite part of the book is the budgeting part. I think one of the issues I see a lot is entrepreneurs not being mindful of how much things cost. When you do not know, you end up spending more money. But the workbook is mainly to focus on raising money and the different things you have to prepare for, especially because you do have to register your campaign with the SEC. You have to tell the SEC about it. There is a process we put it in the workbook so that with at least 90 days ahead of time, you can plan properly.
Moguldom: Black founders have not had the same level of knowledge shared with them on how to raise money, whether it is crowdfunding or an ICO. We have seen the success of Dawn Dickson, but not everyone can raise that amount. What would help Black startups be more successful in fundraising?
Maureen Murat: She (Dawn Dixon, founder and CEO of PopCom and Flat Out of Heels, became the first Black woman to raise more than $1 million in a secure token offering) is someone that could be looked at for aspirational purposes. She wrote about her experience in a blog and how she did not come out of the gate winning. She spoke about how hard she had to work over the years to reach her fundraising milestones.
I think one of the issues is when we see that Lyft IPO, or Uber’s, or even Apple and Amazon — we see them as making all this money. We forget that a lot of those companies are 20 years old. Their successes were in the works for a decade or more before their IPO. Success is not something you can learn as a skill and be able to achieve right away. I think our community needs to lay back on the sizzle reels that we see about our counterparts and focus on what we could do to make it. We have to be patient because this thing of being a successful entrepreneur takes time.
The other thing I would say is we have this weird relationship within our community with how we support each other. It is so weird to me as a Black woman whose family is from Haiti. For some reason in our community, when it comes time to support each other — and supporting each other does not always mean you have to invest or buy what I am selling — we do not promote one another. You know, there are so many things you can do for free for your community. I am always reposting people’s stuff. Sometimes I don’t even know them, but I think it’s better to get it out there and let people decide for themselves if this is something they want to buy, as opposed to saying, “Oh, I don’t know her so I’m not going to promote that.” That is weird to me.
Moguldom: We know that blockchain and cryptocurrency are predominantly white-male dominated. You were recently on a panel with three white men, which is not uncommon for you. If you could ask any of your counterparts to help with this “bro culture” in crypto and blockchain, what would you say to them?
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Maureen Murat: If I could use the analogy of being at the table, then I would say, “Scoot over. There’s room for some other people at this table.” I know there is also this thought: “We don’t need to sit at their table, we could just go create our own table,” which I agree with. But I also think that there are still allies or people who do want to see us succeed. I think we should be willing to give them the tools to help them figure this out. And I know as black people, we are always carrying the burden of educating our friends who do not know better, and I get that we are tired of doing so. But I also feel like if there are people who are open and accepting of this type of education, then I think it is worth sharing information with them.
I would also say to the “bros,” I think what they need to realize there is some sensitivity around seeing a panel or going somewhere, and there are like two Black people in the room or only one Black person on a panel. I am always conscious of that, but they do not have that same feeling, right? They come in, and it is just a regular day.
I think if they could raise their level of sensitivity to that, that would be helpful because they are in a position to say something and do something. I may not necessarily have the connection to get my words heard, but if you can, then you should say something. It is one thing to say “Yes, I support you and I want to be behind you,” but I need — we need — you to say something.