You Promised!

Will an investor have recourse if a crowd funded company fails to perform as promised (and there’s no fraud)? Kickstarter’s policy is that if a creator can’t fulfill its project, it  should find a resolution, which could include offering refunds, detailing exactly how funds were used, and other actions to satisfy its backers. In an equity deal, a business risk is that the company may not succeed (for any number of reasons). But unless there is a material misstatement or omission in the disclosure materials in the offering, there should be no liability for the company.

About JeffKoeppel

I am a corporate/securities attorney in the Washington, DC area. Prior to joining the firm, I was a Senior Attorney Advisor in the Division of Corporation Finance at the U.S. Securities and Exchange Commission. I am a member of the Bars of the States of Maryland, New York and the District of Columbia. You can also follow this blog on LinkedIn at:
This entry was posted in Crowd Fund Act, Crowd Fund Act of 2012, Investments, Legislative Intent, SEC, Small Business and tagged , , , , , , , , , , , , , , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.