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The State of Equity Based Crowdfunding

Washington, D.C.,

August 24, 2014, 700+ days after the JOBS Act was signed into legislation, the SEC still has not released the final rules for Title III: Regulation Crowdfunding.

Over one year ago, February 19, 2013, the nation’s principal leaders and experts on equity and debt‐based financing providing an in‐depth review of the extensive build out and preparation that has taken place to help entrepreneurs’ access capital through online platforms, while protecting the investors who will finance these enterprises. The group touched upon the global advancement of equity‐based crowdfunding, the significant challenges entrepreneurs still face in accessing capital and why it is vitally important that the SEC finalize JOBS Act rule makings.

Watch the Press Conference:

 

Moderator and Host: Karen Kerrigan, President & CEO, SBE Council; Panel of Experts: Sherwood Neiss & Jason Best, architects of the crowdfund investing framework that became law through the JOBS Act and Principals of Crowdfund Capital Advisors; Candace Klein, Founder, Bad Girl Ventures and SoMoLend; Ryan Feit, Co‐Founder, SeedInvest; Vince Molinari, President, GATE Technologies; Sara Hanks, CEO, CrowdCheck; Chris Tyrell, Nehemiah Investments; Kim Wales, Founder of Wales Capital and Chair of the Crowdfunding Professional Association [introduced at 25 minute mark]; Judy Robinett, Entrepreneur, Advisor to Early Stage Companies; Doug Ellenoff, Ellenoff, Grossman & Schole, LLP; Chance Barnett, Founder, Crowdfunder

SEC’s White Said to Push for Lifting Ban on Hedge-Fund Ads

White, who became SEC chairman on April 10, 2013, has suggested the commission pass the existing plan without major changes and add additional protections later, said the people, who declined to be identified because the deliberations are private. The approach would placate congressional Republicans who have complained the SEC has slow-walked the rule, which was required to be completed by July 2012.

http://mobile.bloomberg.com/news/2013-04-26/sec-s-white-said-to-push-to-lift-ban-on-hedge-fund-advertising.html

OSC Staff Consultation Paper 45-‐710 Consideration

On December 14, 2012, the Ontario Securities Commission (OSC) published the OSC Staff Consultation Paper 45-710 Considerations for New Capital Raising Prospectus Exemptions. The Consultation Paper sets out four concept ideas for new prospectus exemptions in Ontario, together with a number of specific consultation questions. The concept ideas are: a concept for an exemption to allow crowdfunding subject to limits for issuers and retail investors, a concept for an offering memorandum exemption, a concept for an exemption based on an investor’s investment knowledge, and a concept for an exemption based on an investor receiving advice from a registrant.

Wales Capital participated in a forum along with other industry thought leaders such as Crowdfund Capital Advisors, SomoLend, Arctic Island, GATE Technologies, Nehemiah Investments, and Ellenoff Grossman & Schole, LLP.

Subsequently, Wales Capital provided comment letters to the OSC for consideration as related to a). Investment Size; b). Oversubscription; c). Two Business Day “cooling period”; d). Revenue Models; e). Rescission Period (Withdrawal Rights).

Read Comment Letters Here

Top 10 Most Influential in Equity Crowdfunding

Top 10 Most Influential in Equity Crowdfunding (via SBWire)

Omaha, NE — (SBWIRE) — 03/29/2013 — As Equity Crowdfunding is sitting at a standstill it will take an army of people to keep the momentum moving forward to get the laws passed and everyone on the same page. Equity Crowdfunding is coming up almost a year since the signing of the JOBS Act by president…

Bloomberg talks Crowdfunding with Kim Wales

Feb. 19 (Bloomberg) — On today’s “Money Moves,” Bloomberg Television focuses on alternative assets and places where investors are investing their money outside of the traditional stock and bond markets. Live with Kim Wales, the founder of Wales Capital, a strategic business advisory firm and Candace Klein, founder of SomoLend, a debt based crowdfunding platform.

Kim is the Chair of the Crowdfunding Professional Association (www.cfpa.org).  Candace Klein is the Co-Chair of the Crowdfund Intermediary Regulatory Advocates (www.cfira.org)

(Source: Bloomberg)

Watch live:

FINRA and the SEC Move One Step Closer to JOBS Act Implementation

Washington, D.C. (PRWEB) January 31, 2013

FINRA’s information request brings optimism to the crowdfunding industry’s leading trade organizations CFIRA and CfPA.

The Crowdfund Intermediary Regulatory Advocates (CFIRA) and sister organization the Crowdfunding Professional Association(CfPA) have conducted a thorough review of the FINRA Registration Process Inquiry form for Crowdfunding Portals, and are optimistic about the progress that is being made toward the implementation of Title II and Title III Crowdfund Investing.

Calculating the odds: Crowdfund Investing

Kim Wales writes about the regulatory decisions looming for the JOBS Act and how instead of imposing heavy regulations that are likely to confuse the U.S. states and EU nations states; government should look at criteria for Intermediaries such as operational and financial transparency, security of information and payments, platform functionality and customer protection.

Read the article in the Cayman Financial Review Magazine

 

‘Crowdfunding’ Rules Are Unlikely to Meet Deadline

By ROBB MANDELBAUM

When the Jobs Act became law in April, supporters proclaimed a new era for small businesses seeking to raise money.

The “game changer,” as President Obama put it in the Rose Garden as he signed the bill, was a provision to let small companies “crowdfund” — that is, sell stock and other securities over the Internet directly to the public. “For the first time,” the president said, “ordinary Americans will be able to go online and invest in entrepreneurs that they believe in.”

But it now seems that dawn will break late on this new age of democratic investing. The Securities and Exchange Commission appears certain to miss its end-of-year deadline for issuing regulations to put the provision into effect. And with the departure of the S.E.C. chairwoman, Mary L. Schapiro, and three of her top deputies — including two who manage the offices writing the regulations — some in the nascent equity crowdfunding industry worry that it could be 2014 before their line of business becomes legal.

The delay has frustrated many crowdfunding backers. The 270 days that Congress gave the S.E.C. to write the rules “is not a suggested timeline; it is a Congressional mandate,” said Kim Wales, an organizer at Crowdfund Intermediary Regulatory Advocates, a lobbying group formed in April to represent the new industry, in an e-mailed statement. “The S.E.C. answers to Congress, not the other way around.”

Read more…
 
Originally published in the New York Times on December 27, 2012
http://www.nytimes.com/2012/12/27/business/smallbusiness/why-the-sec-is-likely-to-miss-its-deadline-to-write-crowdfunding-rules.html

Infographic: Crowdfunding for Equity

By AnnMarie McIlwain, Founder and CEO, www.careerfuel.net

According to the U.S. Bureau of Labor Statistics, 4.6 million jobs were created in 2000 by establishments less than 1 year old. In 2011, this number declined to 2.5 million­—a loss of 2.1 million jobs.

The infographic below shows how crowdfunding-for-equity, a new fundraising tool created by the JOBS Act of April, 2012, has the potential to fill that shortfall in job creation. However, crowdfunding-for-equity can’t happen until the Securities and Exchange Commission (SEC) writes the regulations. The SEC missed their first deadline in meeting this enormous challenge in July.

Please join us in telling the SEC how important it is to meet the end-of-year deadline for this new set of regulatory laws. Click here and sign the petition.

Crowdfunding For Equity Infographic

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