Why This Entrepreneur Likes Equity Crowdfunding

An equity crowdfunder has praised the Crowd Fund Act notwithstanding the regulatory “burden,” because:

  • financial transparency in a startup should be a non-issue;
  • potential liability risk from disgruntled investors should be low due to the disclosures required to be made and the required investment limits;
  • equity crowdfunding encourages a broader shareholder base that the entrepreneur can tap again at a later stage;
  • it permits access to a larger number of potential investors;
  • startups can set their own terms (non-voting shares); and
  • Congress is working on improvements to the Act now.

Every method has its pluses and minuses. If you have the right mindset and business plan, equity crowdfunding can be a real boost. Especially since it can be used in tandem with other regulatory exemptions.

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: http://www.linkedin.com/pub/jeffrey-a-koeppel/0/63/5a9
This entry was posted in accredited investor, Congress, Crowd Fund Act, Crowd Fund Act of 2012, Crowd Funding At the Margins, Crowd Funding Platforms, Film, FINRA, Funding Portals, Investments, Jobs, Legislative Intent, Uncategorized, VC, Venture Capital, Wall Street and tagged , , , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink.

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