The dirty little secret about Kickstarter
was that you could contribute, but you couldn’t get equity because, at least in the US, it was illegal to solicit investors that way.
If you wanted to raise money for a business, there was a mountain of paperwork you had to file and compliance hurdles you had to clear before you could sell shares to individual investors. Originally, these laws were put in place to protect individual investors from getting fleeced.
Today, anybody can set up an options trading account and short the stock market. But before the internet, that was not the case. You had to go through a broker. Why should crowdfunding be any different? After all, if you can contribute $20 for a t-shirt or a movie ticket, why not get a be able to buy a piece of the action as well?
The JOBS Act was designed to change that. And it has. The SEC voted last week, under certain circumstances, to lift the ban on soliciting investment opportunities to unaccredited investors.
In this episode, Daniel K. Stuart
, California Attorney at Law at Manatt
explains the JOBS Act
, which provides a legal framework for people to invest in start-ups by crowdfunding businesses online, and discusses how the new rules could radically reshape the way startups raise capital.
This interview was recorded just prior the July 10, 2013 announcement
by the SEC that they’ve voted “to implement a JOBS Act requirement to lift the ban on general solicitation or general advertising for certain private securities offerings.”
The SEC’s decision to lift the general solicitation ban could be a huge stimulus for grassroots fund raising for small businesses and a way for regular folks to get in on the ground floor of investment opportunities that were previously restricted to institutional investors and high-net worth individuals.
This interview is for general informational purposes only and should NOT be considered legal advice. Please refer any legal questions you may have to an attorney from your jurisdiction.
About the Podcaster:
is Founder and CEO of online social media training
provider Comply Socially
, which helps employers manage the risk and capitalize on the opportunities of social media in the workplace.
He is also an independent communications consultant for hire to businesses, global nonprofits, the US Military, US Federal government agencies and foreign governments. His consulting services include digital strategy, social media audits, social media policy development, online public relations, social media marketing, search engine optimization and web development.
Schwartzman founded iPRSoftware
, his best-selling book "Social Marketing to the Business Customer
" is the first book devoted exclusively to social media for business-to-business communications, and he's founding chair of the Digital Impact Conference
Permalink | Email this post
Powered by Disqus