Advocates urge SEC to propose crowd-funding rules

About a dozen crowd-funding and venture capital representatives and small-business advocates last Tuesday urged Securities and Exchange Commission Chairman Elisse Walter to propose rules for crowd funding.
A type of financing that lets small investors buy equity or debt in startups over the Internet, crowd funding is among several provisions of the Jumpstart Our Business Startups Act — signed by President Barack Obama last April — designed to ease securities registration rules for entrepreneurs.

The SEC has not yet proposed a crowd-funding rule, which was due in January. It is one of several JOBS Act rules that have fallen behind schedule.

“Chairman Walter has the ability to call forward these rules for public comment,” Candace Klein, founder and chief executive of SoMoLend, said at a National Press Club press conference. “As an industry, we are being as proactive as we can to answer the SEC’s concerns about investor protection.”

Supporters of the act, which was approved by large bipartisan majorities, contend that it would help spur economic growth and create jobs by providing capital to small businesses. Skeptics, including state regulators, warn that diluting registration requirements could harm investors. They want the SEC to add more protections.

LEADERSHIP IN FLUX

But SEC leadership is in transition. The president has nominated Mary Jo White, a former U.S. attorney and Wall Street defense lawyer, to be SEC chairman. Ms. Walter will serve in that role until Ms. White is confirmed by the Senate. It’s not clear whether the agency will promulgate a crowd-funding rule before Ms. White arrives.

“We’ve been working very hard on this complex rule-making effort and very much appreciate the extensive input we’ve received from potential crowd-funding participants and others,” SEC spokesman John Nester wrote in an e-mail. “We will continue working hard amid a busy rule-making agenda to get these crowd-funding rules done as soon as possible, with an emphasis on getting them right.”

Crowd-funding advocates met with members of the White House and SEC staffs last Tuesday.

They argue that crowd funding is a safe way for small businesses to raise capital. They note that the JOBS Act contained several investor protections, including caps on the amount of securities that can be purchased. In addition, funding portals have built-in investor education and disclosure features.

The North American Securities Administrators Association Inc. is not convinced.

“Our concerns about the fraud potential facing investors and entrepreneurs related to crowd funding are unchanged,” Arkansas Securities Commissioner Heath Abshure, NASAA’s president, said in a statement. “For crowd funding to have the best opportunity to realize the potential its proponents promised, the SEC must take the time necessary to ensure a reasonable balance between investor protection and the needs of industry.”

The crowd-funding market could total $3.98 billion in five years, according to Sherwood Neiss, a principal at Crowdfund Capital Advisors. He based his projection on a recent study by the University of California, Berkeley.

“We have the ability to flip the switch and solve an endemic problem that faces entrepreneurs across the country,” Mr. Neiss said, referring to a lack of capital for small businesses.

SOURCE: Investment News – Mark Schoeff Jr.

HEADLINE NEWS

This RSS feed URL is deprecated, please update. New URLs can be found in the footers at https://news.google.com/news [...]

NPRAfter Outcry, Crowdfunding Site Patreon Backs Off Plan To Raise ...NPRThe popular crowdfunding service Patreon has backed off plans to change its payment structure, after widespread, vocal and passionate opposition from creators and their fans. Last week, the site announced it woul [...]

EntrepreneurWhy Some Small Business Owners Are Turning to Crowdfunding to Save Their CompanyEntrepreneurMany owners of beloved local businesses, especially in pricier cities, have been forced to swallow their pride and appeal to their customers in times of crisis -- a process streamli [...]

TechCrunchHow hate speech crowdfunding outfit Hatreon crept back online ...TechCrunchIf you want to make a living creating white supremacist content, you're probably not going to do it via sites like Kickstarter and Patreon, which prohibit hate speech. Fortunately there's Ha [...]

ForbesCrowdfunding Do's And Dont's From iFundWomen's Karen CahnForbesDuring our conversation, she was transparent in sharing that her first software company, VProud, failed because she “did everything backwards” and spent too much time trying to perfect the product. “Pe [...]

CoinDeskKickstarter ICO? Don't Count On It Says Crowdfunding Leader ...CoinDeskThe company most widely associated with crowdfunding, Brooklyn-based Kickstarter, has no plans to get into the initial coin offering (ICO) business. Coming in response to the news yesterday that compet [...]

Crowdfunding bid to cut car cover for millennials | Business | The ...The TimesAn insurance start-up that claims it can reduce premiums for millennials will launch a £15m initial coin offering (ICO) next month in another sign of the growin.and more » [...]

TechCrunchFormer Gawker employees are crowdfunding an effort to buy Gawker.comTechCrunchWhile Univision acquired most of Gawker Media's sites last year (and renamed them as the Gizmodo Media Group), the deal didn't include Gawker itself. In fact, BuzzFeed reported last month [...]

Crowdfunding For French CastlesNPRYou too can own a French chateau, in part, anyway. Romain Delaume, CEO of Dartagnans, tells NPR's Scott Simon about a crowdfunding effort underway to preserve La Mothe-Chandeniers. SCOTT SIMON, HOST: What if I told you that for about $60, you cou [...]

CryptoCoinsNewsCrowdfunding Giant Indiegogo Looks to Make ICOs MainstreamCryptoCoinsNewsCrowdfunding platform Indiegogo has a plan to help initial coin offerings (ICOs) break into the mainstream, even as the U.S. Securities and Exchange Commission (SEC) is ramping up its oversight of [...]

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 |