6 ms·
Excerpt: The SEC, responsible for creating the rules designed to fulfill Congress’s mandate in Title III of the JOBS Act, included rules—known collectively as
by mgav 11y ago
Excerpt:
The SEC, responsible for creating the rules designed to fulfill Congress’s mandate in Title III of the JOBS Act, included rules—known collectively as the 12g rule—that are a powerful disincentive for high-growth startups to use what the SEC calls “regulated crowdfunding.”
These rules stipulate that any company that takes on more than 500 individual investors or grows to a size greater than $25 million in assets must start filing regular disclosures just like a publicly traded company. It is all the pain of an IPO without the benefits of the IPO."
- danieltillett 11y agoIt is almost as though the SEC does not want anyone to use crowdfunding other than scammers.
- Avshalom 11y agoAlternately the SEC just recognizes that "crowdfunding" a corporation is just exactly what IPOs were supposed to be for and doesn't feel super happy about having to write the loop holes to their own regulations.
- danieltillett 11y agoExactly. No regulator has ever actively worked towards putting themselves out business. If crowdfunding were to succeed then people might start to consider why we have all this regulation, on the other hand if the SEC structures the rules such that only scammers make use of it then they can say "we tried this and it was a disaster so it is time to bring in more regulation".
- swamp40 11y agoA comment below the WSJ article by a crowdfunding lawyer says that "or" should be an "and", and that makes a huge difference, since a startup doesn't have to worry about the disclosures until they hit $25M.