Equity crowdfunding coming, but rules still on the way

crowdfunding

Equity crowdfunding is on the way, and a panel of local experts discussed the topic Wednesday during the monthly meeting of Venture Connectors.

If you have a business that needs funding and you can’t get a bank loan, you can’t get venture capital and you’ve tapped all your friends and family already, don’t despair. Equity crowdfunding is on the way. We just don’t know when.

A panel of locals discussed the topic Wednesday at the Muhammad Ali Center, during the monthly meeting of Venture Connectors, a Louisville organization that links entrepreneurs with the people who can fund their ideas.

The panelists were William D. Dawson, manager of university commercialization for EnterpriseCorp; Mary Thorsby, owner of the corporate communications company Thorsby + Associates; and Phil Shmerling, founder of InCrowd Capital, an online fund-raising platform.

Crowdfunding involves gathering together small donations from a large number of people, generally using the Internet. Right now, it’s only legal to raise equity crowdfunding to accredited investors — banks, investment companies, large employee benefits plans, charities with assets greater than $5 million and individuals with net worth of $1 million of their own or with their spouse, or who made more than $200,000 in each of the past two years.

It’s also OK to raise crowdfunding if the money is a donation or is made in exchange for a nominal gift such as a T-shirt, or to purchase a good that the company raising the crowdfunding plans to produce.

Last year, Congress passed and President Obama signed the Jumpstart Our Business Startups Act, or JOBS Act, which makes equity crowdfunding legal, subject to rules yet to come from the U.S. Securities and Exchange Commission. No one knows when the SEC will finish the rules, but some general guidelines are already known, Thorsby said.

For example, businesses will be able to raise up to $1 million through crowdfunding, she said, and this won’t limit their ability to raise money through other legal means. Also, Shmerling said, non-accredited equity investors will have to make their investments through online portals such as InCrowd Capital.

One concern about the practice is whether fraudulent businesses will take money from unsuspecting investors. But that doesn’t seem to be happening on a large scale in the United States with the legal forms of crowdfunding, Shmerling said, or in Europe, where equity crowdfunding is already legal.

Equity crowdfunding will open up demand for legal services, for investment advisers, for trusted accountants and for public relations people, Thorsby said. The latter will help businesses devise the pitches they will put on crowdfunding portals.

Crowdfunding is an exciting development, Thorsby said, because it will enable individuals to make investments in some of their favorite local businesses.

“If Anthony Lamas wants to open a Seviche at the end of my street, I would invest in that,” she said of chef Anthony Lamas and his Seviche A Latin Restaurant.

Source: Business First – Kevin Eigelbach

HEADLINE NEWS

Filmmaker Magazine28 Tips on Crowdfunding and Promoting Your Film via Social Media from DOC NYC's Marketing BootcampFilmmaker MagazineContinuing my coverage of DOC NYC's Marketing Boot Camp (read part one here), this installment focuses on two information-packed presentation [...]

BBB Tip of the Week: Giving to crowdfunding sitesThe Spokesman-ReviewThere is a good chance if you are on social media or have an email account that you have been sent a link to a crowdfunding site to support an individual or organization. GoFundMe.com, YouCaring.com, Kickstarter.com [...]

Madison.comLaw change could boost little-used state crowdfunding laws ...Madison.comNew federal rules lift restrictions on using social media to court in-state investors, a change upstart small businesses hope will make it much easier to raise ...and more » [...]

Trump's Economic Plans Suggest New Opportunities for Equity Crowdfunding BusinessChipInWhether you like his political agenda or not, President Donald Trump has clearly altered and energized today's business climate. His plan to deregulate the commercial capital sector sugges [...]

messenger-inquirerLaw change could boost state crowdfunding laws | Business ...messenger-inquirerMADISON, Wis. -- A former Green Bay Packers player whose consulting business has connected 400 high school athletes with college teams got a lesson in ...and more » [...]

NanalyzeSelf Crowdfunding and the Failure of PlastcNanalyzeDeath is a sad thing when if befalls the people around us, and there are 5 stages of grief that people go through when they are mourning the loss of a loved one. There is now a 6th stage of grief that seems to have appeared la [...]

U.S. News & World ReportLaw Change Could Boost Little-Used State Crowdfunding LawsU.S. News & World ReportIngram wants to develop an app that matches players with programs and to launch the venture he's turned to an emerging form of state crowdfunding that lets entreprene [...]

NewsOK.comVideo: Crowdfunding campaign launched on behalf of Jimmy ...NewsOK.comRed dirt music pioneer Jimmy LaFave, who came of age in Stillwater and went on to become an Austin, Texas, music icon, has been diagnosed with a rare form ...and more » [...]

Android Authority (blog)Crowdfunding project of the week: Spark turns your phone into a DSLR camera remoteAndroid Authority (blog)The 'Crowdfunding project of the week' has become a tradition here at Android Authority. This article series is where we highlight some of the ho [...]

MetroJess Phillips MP raises thousands crowdfunding for general election campaignMetroJess Phillips, who represents Birmingham Yardley, asked people 'to 'give as little or as much as you can' to help her retain her seat in June's general election. She claimed that [...]

CFB Finance

Marketwired

  • Crowdfunding
  • Crowdfund
  • Peer to Peer Lending
  • FinTech
  • Reg A+
  • Reg CF
  • Crowdfunding USA

Press Release

Live Crowdfunding .tv

What's Next Step in Regulation A+ JOBS ACTS Title IIII :L Interview : Steve Cinelli with Brian Korn Securities and Crowdfunding/Peer-to-Peer Lending Lawyer, Watch more video library | Conference | Interview | Campaign Showcase | Research | Education |