Category Archives: Crowd Fund Investing

The following was sent to Susan Antilla as well as her editor at Bloomberg News following her March 28th piece, Making Whoopi as Small Investors Absorb Risk: Susan Antilla.

Hi Susan,

How depressing.  I don’t understand how all our communication led to your summary that we are choosing ‘business interest over investor protection.’  When time and again I spoke of working in “the spirit of the law.”

In one of my emails today I even said, “We are not trying to circumvent the law but to come up with a commonsense solution that will let Americans invest a little, essentially risk-less money into entrepreneurs who cannot access capital the traditional way.  I think it is important to reiterate that while we do think the maximum anyone can invest should be limited to $10,000, we highly doubt, based on the principals of crowd funding, that people will be investing that singular, large amount.”

You focused solely on the $10,000 figure when I stressed, “What makes crowd funding such a powerful way to raise money is that thousands of people can invest $100.  People that have large amounts of money and are looking to invest will most likely not use this model and continue to use the traditional means.”  The article made it sound as if everyone was going to risk $10,000?  I thought I had made it clear that my intention was to help startups crowd fund small amounts of money from many different people?

Crowd fund investing is not a solution “to the aggravation of regulation” but rather a commonsense framework to help entrepreneurs while at the same time following the spirit of the securities law: protecting the investor and enabling companies to raise money.

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Over the past few days I had the opportunity to be interviewed by Susan Antilla from Bloomberg News about Crowd Fund Investing (CFI).  When we spoke there were are a few points I always circled back to:

a)    It is not our intention to work around the law but rather to work within the spirit of the law – anti-fraud & investor protection.

b)   If crowd funding has worked in principal to help launch art related projects, then within a commonsense framework, it too should be able to work with small investments in startups/entrepreneurs.

c)    While I agree that the government needs to oversee the securities markets to prevent large, difficult to understand organizations from taking advantage of investors, I do not see how regulating a $25 crowd funded investment in a transparent startup would require the same oversight.

d)   Crowd funding isn’t a way to debunk millions of dollars from Americans but a way to let the people decide if and what they think is a good business idea and if and how much they should invest.  An entrepreneur/startup will not get funded if he doesn’t pass the muster of the crowd or meeting his funding targets.

In addition, the March 26^th blog entry “How Risky is Crowd Fund Investing,” was presented to her as ways to mitigate risk.  Much to my dismay, these points were ignored in her story.

Luckily, the majority of our conversations took place over email.  So take a look at what  she wrote (Making Whoopi as Small Investors Absorb Risk: Susan Antilla) and then see the our response to her (with actual text cut and pasted from email correspondences with her).

Media exposure is important and in order to effectuate change, we need that exposure.  However, it is a shame when reporters with a platform to disseminate two sides of a story utilize it in way to craft a story that has little bearing to what is being presented. It’s especially disappointing when reporters from respectable publications leave out large amounts of information from an interview in order to present an invalid angle to a story.