By , Kendall Almerico
Published September 07, 2016
Three months have now passed since Title III of the JOBS Act legalized true equity crowdfunding where startups can raise up to $1 million in capital online to jumpstart and grow their companies. As an attorney whose practice centers around the JOBS Act and helping companies raise funds through crowdfunding, I am excited to see that Regulation CF’s first report card shows some very encouraging grades for entrepreneurs everywhere.
Related: Who Is Equity Crowdfunding Right For?
Let’s remember: the JOBS Act was signed into law on April 5, 2012 and it took the Securities and Exchange Commission four years, five months and six days (but who’s counting) to put out the rules that allowed this law to finally go into effect. On May 19, 2016, the multi-named law (in addition to being called “Title III” and “Regulation CF,” is known as the CROWDFUND Act – which is a ridiculously contrived acronym Congress concocted that stands for “Capital Raising Online While Deterring Fraud and Unethical Non-Disclosure Act”) went into effect. Three months later, equity crowdfunding gets its first report card. The early results look like the law is on the verge of making the honor roll, as it finishes its first quarter of securities law kindergarten.
Related: Equity Crowdfunding Takes Off: What Your Business Should Know
While I still feel that another part of the JOBS Act -- the Regulation A+ Mini-IPO -- is a better law and gives a company more bang for their buck because they can raise up to $50 million rather than being capped at $1 million, the early report card is encouraging for Title III and it appears that the law will be a success despite the legal limitations it imposes. If we can just get Congress to fix those remaining issues with the law, most notably removing the unnecessary marketing restrictions, Regulation CF has a chance to fulfill its original promise.
Related: How Does an Investor Make Money With Equity Crowdfunding?
A special thanks to one of the pioneers of the JOBS Act, Sherwood Neiss at Crowdfund Capital Advisors for putting together these numbers. And a special thanks to the American public and to risk-taking entrepreneurs everywhere for proving that equity crowdfunding can truly be a game-changer for small businesses and an evening of the playing field that democratizes the investment process for all of us.
https://www.foxnews.com/us/equity-crowdfundings-first-report-card