Equity Crowdfunding Rules: 15 Things Every Entrepreneur Needs to Know Now. Equity crowdfunding promises to open up a new financing source for thousands of capital starved businesses around the country.
Many entrepreneurs are wondering what this means for them and don’t have time to digest the complex 585 page rule proposal. For those entrepreneurs without large amounts of spare time or excess legal budgets, here is a quick list of items that you should be aware of now: 1) It’s not legal yet. The rules can still change.
The proposed rules were released on October 23, 2013 and are currently in a 90 day comment period. 2) Up to $1,000,000 in Financing. 3) Individual Investor Limits. 4) Investor Self-Certification. 5) Everyone can participate. 6) Simultaneous Reg D Offerings. 7) Limited Advertising. 8) Communications Disclosure. 9) Internet Funding Portal Required. 10) Cap Table Issues / No Shareholder Limit. SEC Proposes Crowdfunding Rules. Www.sec.gov/rules/proposed/2013/33-9470.pdf. Crowdfunding Signed into Law under JOBS Act. President Gives Small Business and Investors Access to Unprecedented Capital WASHINGTON DC — Today the President signed the Jumpstart Our Business Startups (JOBS) Act in to law.
This bipartisan legislation fulfills the President’s call to reduce regulatory burdens that prevent many small and young businesses from raising capital – specifically by allowing crowdfunding, expanding mini-public offerings, and creating an “IPO On-Ramp” consistent with important investor protections. The legislation is remarkable, as it (rightly) reverses more than 90 years of restrictions on raising capital. Crowdfunding’s benefits will now be felt around the country as small businesses and start-ups look not to traditional models of financing, but to the new ability of seeking investment from unaccredited investors for raising capital. Legislation creating an exemption for investments of up to the lesser of $10,000 or 10% of the investor’s annual income passed the U.S. Stacey Price Kimberlee Williams. Senator Merkley’s Letter to President Obama 7/26/2012 – supported by The Soho Loft « The Soho Loft.
Senator Jeff Merkley (D-Oregon) wrote this letter addressed to President Obama on Thursday July 26, 2012.
It is an excellent piece on what is needed for crowd fund investing to become an effective law – The Soho Loft supports this thorough outline of what is needed. Please share this letter. U.S. Senator Merkley Statement for the Record of Senator Jeff Merkley Regarding Crowdfunding in Title III of H.R. 3606 July 26, 2012 Mr. Introduction If crowdfunding is going to take off, this new market needs to inspire confidence in both investors and small businesses.
In putting this legislation together, I was guided by two goals: 1) enabling this market to work for startups and small businesses and 2) protecting ordinary investors from fraud and deception. The SEC is currently in the early stages of the rulemaking process required under the law. Funding Portals The law provides two regulatory options for firms seeking to provide crowdfunding services. National Securities Association. The Crowdfund Intermediary Regulatory Advocates. Survey Shows Crowdfunding Will Have Positive Impact on IPO Market. (c) Crestock Capital markets executives believe the new crowdfunding provisions of the Jumpstart Our Business Startups Act will have a postive impact on the US IPO market, according to a new study released by BDO USA, LLP, a financial and tax consulting firm in Chicago.
BDO’s study is based on a telephone survey that interviewed 100 capital markets executives at leading investment banks. Fifty-eight percent (58%) of the executives surveyed believe the crowdfunding provision of the JOBS Act, in which small businesses can raised up to $ 1 million in equity offerings per year, should have a postive impact on the U.S. IPO market. “The JOBS Act was the subject of much debate before it was signed into law and, based on our survey, the investment banking community seems to agree with both the law’s proponents and detractors,” said Brian Eccleston, a Partner in the Capital Markets Practice of BDO USA. United States - Press Releases. Chicago, IL – According to a new study by BDO USA, LLP, one of the nation’s leading accounting and consulting organizations, capital markets executives at leading investment banks have conflicting views of the recently enacted JOBS Act.
A narrow majority (55%) of I-bankers believe the JOBS Act will be successful in increasing the number of businesses going public on U.S. exchanges. However, that growth will come with one major drawback as an identical majority (55%) of capital markets executives believe the new law’s rollback of regulatory requirements for these newly public companies increases the chances of scandals at these businesses. Solid majorities of the capital markets community suggest that there will be a "positive impact" on the U.S.