Crowdfunding is a method for raising capital whereby many individuals network and pool their funds, usually via the internet or social media. Crowdfunding methods are used in a variety of circumstances... more +
Crowdfunding is a method for raising capital whereby many individuals network and pool their funds, usually via the internet or social media. Crowdfunding methods are used in a variety of circumstances including, but not limited to, supporting charitable organizations, disaster relief, product development, artistic projects, and financing start-up companies. The passage of the JOBS Act of 2012 sought to broaden the use of crowdfunding in developing private capital for start-up companies by relaxing certain SEC investor registration requirements.
Crowd funding under the JOBS Act
Crowdfunding: What Is It? Who Will Use It? Is It Worth the Hype?—Fox Rothschild’s James Saksa
Background-We analyzed the terms of venture financings for 118 companies headquartered in Silicon Valley that reported raising money in the first quarter of 2013....more
Direct investment in renewable energy projects has been an anticipated financing option among editorialists and bloggers the past year, and seems to finally be gaining traction in the United States....more
This week the SEC appointed Keith F. Higgins as Director of the Division of Corporation Finance. We don’t know him personally but have seen him speak at conferences and observed his leadership of the ABA’s Federal Regulation...more
"[Crowdfunding] lays the riskiest investments at the doorstep of those investors that can least afford the risk. And it won’t create jobs except for plaintiff’s lawyers…”...more
On March 8, 2013, the Ontario Securities Commission (OSC) closed the comment period on its Staff Consultation Paper 45-710: Considerations for New Capital Raising Prospectus Exemptions (the Consultation Paper), which sought...more
It was another week of speculation as to when the SEC might finalize or propose any JOBS Act rule. Broc Romanek of the TheCorporateCounsel.net pointed to one article which said the current JOBS Act proposal on eliminating...more
Mary Jo White, now chair of the SEC, submitted a written statement in her confirmation hearing that said “First, I would work with the staff and my fellow Commissioners to finish, in as timely and smart a way as possible, the...more
On Thursday the SEC sent out a press release captioned “SEC Seeks to Halt Scheme Raising Investor Funds Under Guise of JOBS Act.” The action doesn’t really have anything to do with the JOBS Act, as in the sense that it seeks...more
Reuters reports that Representative Patrick McHenry, of North Carolina, who chairs the House Financial Services oversight panel, said he believes the Securities and Exchange Commission lost its ability to enforce the ban on...more
It’s about one year since President Obama signed the Jumpstart Our Business Startups Act (the JOBS Act), designed to help new companies raise capital and go public. For individual investors the most troublesome provisions of...more
On March 26, 2013, the SEC's Division of Trading and Markets issued a no-action letter indicating that it would not recommend enforcement action under Section 15(a)(1) of the Exchange Act if a venture capital fund adviser and...more
The SEC recently granted two accredited crowdfunding sites exemptions from the broker-dealer rules because the type of carried interest (or close equivalent) used to compensate the site is not transaction based compensation. ...more
My friends in the start-up community are excited about recent headlines suggesting the SEC has greenlighted crowdfunding. Leave it to the lawyer in the crowd to suggest they temper their excitement. As lawyers, we are used...more
When President Obama signed the JOBS Act almost a year ago it introduced a new era of startup financing. But until the SEC makes the required rules, the fundraising bonanza known as crowdfunding that will allow companies to...more
The SEC has granted AngelList relief on accepting transaction based compensation for crowd funding, exempting it from the broker-dealer rules. A couple days ago, the SEC granted relief to thefundersclub.com. Makes you kind...more
Thefundersclub.com operates a really cool website. The publicly available page advertises “The best way to invest in startups. Insider access to pre-vetted startups. Low minimum investment sizes. Free membership. Join...more
Last week, the Department of Corporations issued this bulletin which it styled as a “Crowdfunding Update”. The Bulletin makes several important points....more
The Securities and Exchange Commission’s (SEC) Division of Trading and Markets and the Financial Industry Regulatory Authority (FINRA) recently published items of particular interest to firms following the progress of the...more
Producer, Phelim McAleer, recently released a new documentary entitled "FrackNation," intended to debunk misstatements and false impressions created by the 2010 film "Gasland." Frack Nation was financed through the...more
In yesterday’s post, I mentioned Professor Joan Heminway’s recent essay on crowdfunding. She notes that some crowd funding arrangements may “may look less like investment instruments commonly known as common stock or...more
The 2013 Academy Awards were something of a coming-out party for crowdfunded films: three crowdfunded films were nominated for awards. One of those films, Buzkashi Boys, has a Canadian connection: Montreal artists get a...more
In Silver Hills May Tarnish Crowdfunding, I wrote about Justice Roger J. Traynor’s alternative definition of “security” under the predecessor to the Corporate Securities Law of 1968. Silver Hills Country Club v. Sobieski, 55...more
Crowdfunding is legal. Sort of. Before you start soliciting for investors on Facebook, you need to know that general solicitations to sell equity to your company not listed on the stock exchange or otherwise registered is...more
The annual “SEC Speaks” conference, in which Securities and Exchange Commission (SEC) representatives review the agency’s efforts over the past year and preview the year to come, was held on February 22-23, 2013. A...more
SEC commissioners called for a more regulations and oversight to protect investors from fraud and other dangers, reports Miller Canfield securities compliance and enforcement lawyer Matt Allen. Allen attended the 42nd...more
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