BY Dan Mayfield
The rules aren’t even official yet, and CPAs are already getting calls.
Last week the SEC announced that it would consider allowing companies to use crowdfunding portals to sell equity stakes in companies. It’s a big step. It’s also a complicated one: The rules that would allow companies to sell shares, similar to the NYSE or NASDAQ, on Kickstarter or similar sites need to account for a lot of complexity.
“It’s going to be a growing area for me,” said Thad Porch, CPA, of Porch and Associates. “If I can get more startups into crowdfunding, and launch them to angel and then venture capital, that’s great.”
He said he’s been getting a lot of questions along those lines lately.
Roger Nagel, of Nagel CPAs, said the same thing.
“I’ve had a few questions from the companies that need to raise capital. They are so desperate. It is impossible to get equity financing for anything right now,” Nagel said. “The demand is at a record level for capital. People are willing and eager to explore options.”
But, Nagel said, even if companies do want to go the route of raising money through a crowdfunding site, the SEC rules that will allow equity shares are, simply, a bear.
“If the whole idea is to end up with a new company that creates jobs, you have to get regulations out of the way. Regs cost money. The more you have, the more expensive it is,” Porch said. “I think it’s going to get expensive.”
The new rules are under consideration. But, they could fundamentally change how startup companies’ shares are traded. They could also open up angel investing to a wider variety of investors. That part of the equation, Nagel and Porch said, will likely be a major point of discussion over the next three months for rule makers.
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