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The Equity of the Crowds

The Equity of the Crowds

Congressmen to SEC: Crowdfunding Laws Are Taking Way Too Long To Pass

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When President Obama signed off on the JOBS Act, it looked like crowdfunding project backers were going to be rewarded for their faith in pipe-dream projects with some real equity. Unfortunately, those laws are taking an extremely long time to actually take hold.

Congressmen Jared Polis and Darrell Issa, along with the 28 other members of the House Innovation and Entrepreneurship Read More

The Equity of the Crowds

Projects on Kickstarter Four Times More Likely to Get VC Funding Than Indiegogo Campaigns

(Photo via Espen Sundve)

Crowdfunding began as a cool way for your college roommate to raise money to finally record his first album, but has quickly gone on to be a bigger part of how the tech industry does business.

CB Insights, a research analytics firm that bills itself as the “OkCupid for venture vapitalists,” has released the first study of crowdfunding’s growing role as a serious part of the tech business. The survey took a look at every crowdfunded tech hardware project on either Indiegogo or Kickstarter, which came out to 443 projects. Read More

The Equity of the Crowds

Indiegogo CEO Says New Crowdfunding Laws ‘Will Totally Change the World’

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Quick, who is the first name you think of when someone says crowdfunding? We bet it’s Kickstarter. That name has become synonymous with using the crowd to fund projects that would otherwise never see the light of day. But the truth is, crowdfunding really owes its roots to Indiegogo.

They may not have the same notoriety, but Indiegogo CEO and cofounder Slava Rubin is having a great year. They’ve rebranded the site, raised a $40 million Series B, and as of this morning, launched their new mobile app. Read More

The Equity of the Crowds

Don’t Hold Your Breath for Equity-Based Crowdfunding In 2013

(Photo: James Cridland via Flickr)

As soon as the JOBS Act passed back in April, would-be equity-based crowdfunding platforms were crawling out of the woodwork, ready to be open for business as soon as the S.E.C. handed down the rules governing this wild financial frontier.

But it seems they might be all dressed up with nowhere to go, for now at least. The New York Times reports that the S.E.C. is most likely going to blow its end-of-year deadline. In fact, it might be 2014 before equity-based crowdfunding is a reality. Hope your startup wasn’t depending on selling shares to average Internet joes!

Read More

The Equity of the Crowds

The U.K. Already Has Equity-Based Crowdfunding, and This Startup Just Set a Record

(escapethecity.org)

U.S.-based crowdfunding sites like Kickstarter, Indiegogo and ArtistShare offer a huge range of creative perks like T-shirts, backstage access, chip clips, or a week’s worth of personal training alongside Bret Easton Ellis. But what if a startup could offer equity in the company to the little people who helped make it happen?

The JOBS Act, passed in April, gave the SEC a directive to clear the path for equity-based crowdfunding (some call it “crowdinvesting”) sites. The regulatory agency is deliberating over the rules now, with the goal of publishing the new rules by January. We’ll see how that goes, given how complicated crowdfunding is. What are the disclosure requirements for companies? What kind of due diligence will an equity-based crowdfunding “portal” have to do? Yes, the Act and the SEC are calling crowdfunding sites “portals.”

Meanwhile, across the pond, equity-based crowdfunding is already legal and underway. A London-based startup called Escape the City has raised £557,920 (roughly $892,481) on a £600,000 goal with 14 days to go on the equity crowdfunding platform Crowdcube. The startup upped its goal because of high demand. Escape the City is a social network somewhere between LinkedIn and Idealist.org; it aims to match dissatisfied corporate drones with new jobs, more noble jobs, or professional adventures abroad. Read More

The Equity of the Crowds

As Equity-Based Crowdfunding Heats Up, Hedgeable Promises Free Platform

Mr. Kane. (Quora)

We’ve discussed before how the JOBS Act will allow anyone–including people who are not accredited investment professionals–to put money into startups via crowdfunding. It’ll be nine months before the SEC releases the final rules, but that doesn’t mean the sector is standing still. Today another player jumped into the fray: Online investment management service Hedgeable has announced that in early 2013, it will launch its own crowdfunding platform–and it’ll be free of charge. Read More

The Equity of the Crowds

The JOBS Act, Which Rolls Back SEC Rules In Order to Help Startups Crowdfund, Passes in the House

JOBS Act supports via Angel List

Ready your startups, the early stage investing climate is about to go into overdrive. This afternoon, the JOBS Act (or Jumpstart Our Business Startups Act) passed in the House with an overwhelming vote of 380-41. Next, the bill moves to President Obama, who is expected to sign it into law.

It’s been a bit of a bumpy ride. The JOBS Act originally passed in the House a few weeks ago with a 390-23 vote a couple weeks ago. The Senate’s version of the bill, called the CROWDFUND Act (or Capital Raising Online While Deterring Fraud and Unethical Non-Disclosure Act), added a number of safeguards for investors and passed last week 73-26. The JOBS Act was then revised to reconcile with the Senate’s bill, which is why the final version had to move back to the House for another vote.  Read More

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

The Equity of the Crowds

After Flying Through the House, Crowdfunding Bill Stalls in Senate

Sen. Brown.

Bad news for IndieGoGo and other startups that want to be allowed to solicit up to $1 million in investment from the crowd. The bill that would allow companies to ask openly for investments in installments of just $1,000 or less has slowed down in the Senate over concerns with the protection of small-time investors. The bill, introduced by Massachussetts senator, the Libertarian-leaning Scott Brown, is being targeted by groups like the North American Securities Administrators Association Inc., which says the bill would promote the fleecing of unsavvy investors.

Proponents say social media ensures that scammers will be outed in short order. Read More