Each year, Crowdfund Beat Media Group assesses the landscape of the crowdfunding industry to identify thought leaders and individuals significantly impacting the evolution of digital finance. To culminate this search, the Group selects a Crowdfunding Person of the Year, whom it believes has made an indelible mark to advance adoption and growth of the crowdfunding effort. With Title III of the JOBS ACT, effectively Regulation CF, went live past May, we have identified two individuals that have been working tirelessly and successfully in making crowdfunding a reality, and feel honored to recognize them as 2017 Crowdfunding Persons of the Year.
Jason Best and Sherwood “Woodie” Neiss are Principals at Crowdfund Capital Advisors, where they have advised government agencies, NGOs and global leaders on the merits of crowdfunding and its impact on entrepreneurial activity. Prior to the expanse of their travels and relationships, including with the World Bank and InterAmerican Development Bank, they initiated Startup Exemption, with Zak Cassady-Dorion, which laid the foundation of the legislative framework that evolved into Title III.
It is due to these past and ongoing contributions that Crowdfund Beat Media feels compelled and honored to award Woody and Jason 2017 Crowdfunding Persons of the Year.
By Jorge Sanchez, Crowdfund Beat Guest Editor,
Innovation and entrepreneurial activity is driven by entrepreneurs, their ideas, actions, and the relationships formed in the marketplace. While this has been the case for economic growth, the primary funding mechanism we have had in place is not a natural extension of these business processes. We have had a large proportion of the entrepreneurial class being underserved by the capital needed to fund or grow their ventures. This was because the current legal landscape prohibited it. However, today if a tech startup or business needs capital they have modern technology at their disposal that enables them to leverage their social networks in order to fund their startup or grow their businesses.
As a result of the Great Depression, regulatory actions were taken that imposed limits on where entrepreneurs can seek funding. Fueled by fear and desperation, the risks and power of investing in our nation’s business opportunities were removed from the public and placed in the hands of banks and wealthy investors. Because most people did not have access to these investors, small business, and startup financing became a function of bankers and collateral, not innovation and market demands.
Fortunately, this flaw in our funding landscape has been mended. Through the actions of a few ambitious and determined men, decades-old financial regulation have been amended to reflect modern capabilities and economic reality. Today, markets don’t just function to determine which businesses survive, but also which businesses are born.
Sherwood “Woodie” Neiss, Jason Best, and Zak Cassady-Dorion are not politicians, they are not lobbyist, nor are they D.C. insiders. The men behind, perhaps the most important policy change of our lifetimes, are entrepreneurs. The three Thunderbirds are businessmen with experiences that awarded them with intimate knowledge about the needs of startups and the pains of raising capital. They did not just embark on a political journey, they instead created The Startup Exemption and to tackled head on the problem, making regulatory change. Their historic campaign lasted just 460 days, culminating in the framework that was adopted and signed into law by president Obama in April 2012.
The journey began with a problem that had been widely acknowledged, but was never addressed. The impact the group has and will continue to have is the direct result of their development of a solution with the collaboration of stakeholders and early thought-leaders like Kevin Lawton, Danae Ringelmann, and Steve Cinelli in the form of a framework that would later go on to become a part of the JOBS Act
In the halls of congress, the trio of entrepreneurs were an anomaly and there was doubt and pessimism that the group could accomplish their task at all, especially not with the absence of a large war chest and an army of lawyers. But perhaps that is exactly why the political neophytes were able to accomplish their lofty goal in a year and a half, instead of the five to ten policy experts predicted.
Those on The Hill turned out to be people that understood technology and how to leverage it, not the technological laggards that policy makers are commonly portrayed as. The group also discovered that they had tapped into a problem with universal support. During a time with an alarming unemployment rate, flat GDP growth, and a slowdown in the flow of cash from banks to small businesses, D.C. lawmakers were happy to be met with a solution for the biggest problem facing the nation.
In May 2016, Regulation Crowdfunding of the JOBS Act went live and the startup exemption become law. Over half a year later, we have seen a steady and methodical adaptation of the innovation. Jason and Sherwood are now principals at Crowdfund Capital Advisors (CCA), where they advise governmental leaders and stakeholders, like the SEC and the World Bank, on how to draft and implement crowdfunding in order to ignite job creation from the grassroots level.
When asked about the adoption of the regulation so far, the pair expressed optimism and satisfaction. They see success by how it is being embraced by the industry, thoughtfully and with care to ensure the integrity of the law is upheld and the balance of investor’s and entrepreneur’s needs and concerns are maintained. The crowdfunding community looks to amend the laws to further strengthen the fit between the needs of the entrepreneur and the laws regulating them.
Amendments to the original rules are coming to a boiling point. The Fix Crowdfunding act, proselytized by many within the crowdfunding world, aims to make the exemption more friendly and appealing to issuers by raising the limits on funds that can be raised, enabling the use of special purpose vehicles, and removing liabilities away from portals for the issuers who use their services. While any changes to the regulation are being carefully scrutinized to ensure adequate investor protection, Sherwood believes the regulatory bodies are motivated to support job growth by empowering entrepreneurs with access to capital. They will do so with the data and case studies that have been collected since the first iteration of the law went live in May 2016.
Jason and Sherwood’s outlook crowdfunding is bright, they see a thriving asset class which creates a new path to capital for underserved entrepreneurs who collectively make up the largest non government source of employment.
It is for these efforts and their continued commitment to the progression of Crowdfunding, that Sherwood Neiss and Jason Best are being honored as the 2017 Crowdfunding Person of the Year.