August 2012 – Crowdfunding Professional Association

SEC Uses JOBS Act to Set Up New Roadblocks to Crowdfunding

Disappointing news came out of the SEC meeting yesterday designed to open the way for crowdfunding in the U.S.

Rather than lifting the ban on general solicitation (we’ll explain that in a minute) in order to make it possible for more people to invest in American startups, the SEC proposed rules that would establish various different classes of investors, each perhaps with its own regulations. Needless to say, this move could make it more rather than less complicated for people to invest in startups, erecting new roadblocks rather than clearing away old ones.

Some quick backstory for those of you who assumed crowdfunding would immediately become legal when President Obama signed the JOBS Act into law back in April:

The SEC has been given until 2014 to spell out the specific rules of crowdfunding.

Oops! Venture Capital Rebirth Delayed by Third Blown Deadline

The Securities and Exchange Commission now says it needs at least another week before it can detail its proposal to rescind longstanding prohibitions against startups advertising that they are seeking investors.

The SEC had been scheduled to consider the changes at its open meeting today following a delay last week. Prior to missing this week’s deadline and last week’s deadline, both self imposed, the commission missed a July 4 deadline spelled out in the JOBS Act, a recently approved piece of legislation that, among various other securities rules, loosens restrictions on how startups can raise money from venture capital funds and other wealthy “accredited investors.” The commission is now slated to discuss the so-called general solicitation rules at a meeting Aug. 29.

Allowing startups to broadly advertise their fundraising will fuel a more diverse ecosystem of investors beyond Silicon Valley’s elite fraternity of venture capitalist and “super angels,” as we wrote earlier this week, and could also make it easier for tech ventures outside the Valley to raise funds. But the SEC needs to clarify exactly what sorts of advertising will be allowed and when the ban on advertising will be lifted. It must proceed carefully: A previous deregulation of startup advertising, from 1992 to 1999, was blamed for an explosion in “pump and dump” scams.

Feds to Break Up Tech Investors Party

A federal regulatory meeting Wednesday is expected to shed light on how aggressively startups can solicit investments and thus reach beyond venture capitalists and other established investors.

At the meeting, Security and Exchange Commission Chairman Mary Schapiro is expected to reveal how the SEC proposes to rescind longstanding rules that bar startups from advertising that they are seeking investments. She is also expected to unveil new proposed rules outlining how aggressive startups can be when engaging in such “general solicitation,” which is barred under the SEC’s “Regulation D” rules but allowed under the JOBS Act signed into law in April. The proposals would then be subject to a public comment period expected to last one to three months.

Top 10 Most Influential People in Business Crowdfunding

Every revolution needs a leader. But when it comes to revolutionizing the funding landscape for millions of entrepreneurs and small business owners, it takes a crowd.

I got involved with crowdfunding legislation in November 2011 when the U.S. House of Representatives was preparing to vote on a bill that passed and subsequently – over the next several months – helped shape what was the final crowdfunding bill under the JOBS Act.

Along the way, I’ve met hundreds of visionary entrepreneurs, business leaders, legislators, policymakers and advocates who are blazing the trail for safe and responsible business crowdfunding.

How to Create Winning Crowdfunded Campaigns

Last month a video game project called Ouya hit the million-dollar mark on Kickstarter in just more than eight hours. It was the biggest single-day crowdfunding total in Kickstarter history.

The project went on to receive more than $2.5 million in pledges within 24 hours. With just a few days remaining in its campaign, it has 46,914 backers and a whopping $ $6,061,081 in pledges.

Granted, Ouya is an exceptionally successful case, but what many business owners don’t know is that crowdfunding is not just for start-ups—and it’s not just about the money. A crowdfunding campaign can address some of the most significant challenges that small business owners and start-ups face. From validating a new product or idea, to gathering feedback from the marketplace and finding the resources to scale, crowdfunding can be the answer to your biggest challenges.

I’ve turned to the top crowdfunding experts to give us their most creative insights and strategies to leverage the power of crowdfunding.

How to Make $2 Million in One Day

Last month, a video game project called Ouya hit the million-dollar mark on Kickstarter in just more than eight hours. It was the biggest single-day crowdfunding total in Kickstarter history.

The project went on to receive more than $2.5 million in pledges within 24 hours. With just a few days remaining in its campaign, it has 46,914 backers and a whopping $$6,061,081 in pledges.

Granted, Ouya is an exceptionally successful case, but what many business owners don’t know is that crowdfunding is not just for start-ups–and it’s not just about the money. A crowdfunding campaign can address some of the most significant challenges that small-business owners and start-ups face. From validating a new product or idea to gathering feedback from the marketplace and finding the resources to scale, crowdfunding can be the answer to your biggest challenges.

How To Make Sure Your Crowdfunding Dreams Don’t Turn Into An Investor Relations Nightmare

The concept of crowdfunding to launch and grow your business may seem like a dream come true—reduced cost of capital, access to new pools of investors, the community opening their arms and wallets— all giving your business a shot to make it big. While crowdfunding (both donation and equity based) offers amazing opportunities, it also brings fiduciary responsibilities, commitments of time, reporting requirements and the potential to let down the people who mean most to you in the world if the unforeseen happens and failure occurs.

As the authors of the Startup Exemption Framework that made debt- and equity- based crowdfund investing legal, we take the responsibility of educating entrepreneurs and investors extremely seriously. Anyone that has been in the private equity or entrepreneurial community long enough knows how hard it is to raise capital, whether that is from your professional investors or from friends and family. We want to ensure that people crowdfund responsibly—which is why we will be contributing updates, data and advice to TechCrunch readers in the coming months.