Duh? Crowdfunding is Risky.

This is news?

The Wall Street Journal reports today that crowdfunding is ” …as close to gambling as you can get.”

In a story in its Retirement section, the Journal finds that, OMG, investing in crowdfunded companies is risky and just the idea suggests that the company is not worthy of investment, quoting a professor that it’s “a major red flag is that the company is looking to crowdfund for equity in the first place.”

However, the investing public seems to like the idea as “$16.2 billion was raised through the various types of crowdfunding in 2014, up 167% from the year before.”

The author of this story appears to be a financial Rip Van Winkle.

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, Broker dealers, Congress, Crowd Fund Act, Crowd Fund Act of 2012, Crowd Funding At the Margins, FINRA, fraud, Funding Portals, Jobs, Legislative Intent, SEC, Small Business, technology, VC, Venture Capital, Wall Street and tagged , , , , , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink.

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