The Equity of the Crowds

Crowdfund Act Passes In the Senate, But What Will It Mean for Startups?

Some familiar faces among AngelList's petition to pass the JOBS Act. (via angel.co/jobs-act/thank-you)

Update: On March 27th, the House passed a reconciled version of the JOBS Act, which includes the provisions from the Senate’s CROWDFUND Act, detailed below.

This afternoon, the Senate passed the Crowdfund Act by a resounding 73-26 vote. If you’ve been following the JOBS Act, which has won support from venture capitalists and founders alike (for evidence, just scroll down to this petition’s list of supporters), the Crowdfund Act is the Senate’s version of the JOBS bill, which now includes the requirement that startups looking to raise capital do so from SEC-approved websites.

The JOBS Act, short for  Jumpstart Our Business Startups, centered around rolling back some investor protections in the name of making it easier for small businesses to raise capital.

Although the JOBS bill passed in the House in a 390-23 vote a couple weeks ago, because legislators were successful in amending a number of “more stringent safeguards for investors,” the Crowdfunding Act will need to be reconciled with the JOBS Act and head back to the House, rather than to President Obama for approval, reports Politico. Read More

IP Uh Oh

It’s Not That Groupon Wants to IPO, So Much as It Has To (Legally and Financially Speaking)

BAD KITTEH.

In case anyone was wondering why Groupon, the tech press’s favorite new punching bag, would restart its delayed road show and try to go public right now (during the biggest IPO backlog since 2000), there are a couple easy answers.

Bloomberg reports that Groupon (1) both needs cash to grow and (2) is close to the 500-shareholder threshold, at which point its required to report detailed financial information every quarter. Usually that’s the point where startups figure: Eh, might as well IPO.

Groupon, which is seeking to raise as much as $540 million, but only selling five percent equity, claims that it doesn’t need the money for at least a year and isn’t desperate for the cash. But as Bloomberg reports: Read More

Secondary Markets

New Law Would Allow Companies Like Facebook To Stay Private Much Longer

private

While yesterday brought news that Facebook is courting bankers for an upcoming IPO, CEO Mark Zuckberg has always be publicly coy about the idea of entering the public markets.

A new bill proposed by Reps. David Schweikert (R-AZ) and Jim Himes (D-CT) would amend the Securities Exchange Act of 1934, setting aside a number of limitations that push fast growing tech companies to IPO. Read More