By Joy Schoffler, CrowdFundBeat guest contributor, The congressional letter sent to the SEC last week urging them to enact Title III rules is just one more example of a ground swell of support occurring in the market for the full implementation of the JOBS Act, which will allow all U.S. citizens to invest in private offerings. While the industry as a whole understands that the SEC has been given an immense task, we are hopeful that the proposed rules as amended during the comment period will be enacted.
While not perfect, especially for raises over $500,000, these rules will do a great deal to help entrepreneurs who are looking to raise more modest amounts achieve their goals. While the rules do have their challenges, many in the industry believe that implementing the rules and fixing them later will lead to much better results in the market than waiting another three years to have them be perfect.
There is also evidence coming out of leading platforms, like EquityNet, that most startups that will utilize crowdfunding will not actually be raising over $500,000. Out of the nearly 23,000 entrepreneurs that have raised over $240 million through the EquityNet site, the average amount of capital sought by crowdfunding companies is $1.7 million, with over 50 percent of those companies seeking less than $500,000. These numbers indicate that the proposed rules as written and amended would have a major impact on entrepreneurs.
At the end of the day, this letter is just one more example of the push to encourage the SEC to release the amended rules. Ron Miller, CEO of StartEngine, a large incubator in southern California, is leading a movement in the industry to encourage the SEC to add a vote to its October meeting. To join the conversation and to get more information, visit their Facebook page and write a comment letter to the SEC yourself encouraging them to act on Congress’s recommendation.
Joy Schoffler is Principal of Financial Services and FinTech Public Relations firm Leverage PR and Board Member of Crowdfund Intermediary Regulatory Advocates (CFIRA