Great progress has been made to legalize Crowdfunding in the US with 3 bills before Congress. We have seen Crowdfunding gain traction in the US with 2 donation-based projects raising over $1.5M each on Kickstarter. In addition, the UK is accelerating it’s push to encourage Crowdfunded Investments by offering a new tax credit. Now is the time to push Crowdfund Investing legislation over the finish line here.
As we move the Crowdfund Investing legislation forward it is important to keep the following in mind. 1) It has to be written so a market can successfully be formed, within the confines of the regulations. (i.e., Trying to crowdfund $250,000 in increments under $1,000 is going to be nearly impossible if entrepreneurs are forced to raise 100% of their funding request in order to be funded). 2) It has to be easy to understand from an entrepreneur’s, an investor’s and intermediaries point of view. 3) It needs to be fair, without needless bureaucracy and costs where the advances in the Internet and technology can offer enhanced security and streamlined process and 4) It needs to be done in a way that our Nation’s Job Creators can start capitalizing on its effectiveness NOW… without getting bogged down by lengthy SEC rule making.
In order to help advance this legislation, the Startup Exemption,which represents over 5,000 active crowdfunding followers (including entrepreneurs, investors, intermediaries, security lawyers, authors, and security experts) sought a consensus on the 3 bills. The goal was to take the best of them and consolidate it into one that would provide access to capital without undue bureaucracy. It is important to keep in mind that the technology built into today’s Internet can allow both the transfer of information between entrepreneurs and potential investors as well as intermediaries and regulatory agencies without lengthy and costly bureaucracy — all in a transparent and accountable fashion.
