4 ms·

I wish securities laws were such that you could community fund your startup without running afoul of them. If you could, say, take a few hundred bucks for a tin

I wish securities laws were such that you could community fund your startup without running afoul of them. If you could, say, take a few hundred bucks for a tiny % of the company I might be interested in that, especially since you idea seems like it ain't half bad. But having to donate $8k or more, and then being saddled with a Jeep, is going to make it hard. I bet you could get $8k and keep your car if the laws were different.

jacquesm 17y ago
I think that as long as shares are to identified people the securities laws are pretty lenient. It's as soon as shares are traded publicly and 'to bearer' that you get in to the trouble zone. more reading: http://en.wikipedia.org/wiki/Accredited_investor http://en.wikipedia.org/wiki/Accredited_investor http://www.entrepreneur.com/money/financing/loansfromfriendsandfamily/article51542.html http://www.entrepreneur.com/money/financing/loansfromfriends... http://www.angelblog.net/Startup_Funding_the_Friends_and_Family_Round.html http://www.angelblog.net/Startup_Funding_the_Friends_and_Fam... It's definitely possible I think, if the funding is structured as a loan then there is no problem at all, if it is in return for equity you have to be a bit more careful but I don't think that it is a requirement that every investor is an 'accredited investor', especially not if the individual amounts are small enough. I'd certainly make sure that was 'non voting' stock, otherwise you have a real issue with share holder meetings right away, which (for instance) with 10 people supplying $1000 each would not be in relation to the investment.
- mattmaroon 17y ago
  You cannot even legally post on Twitter "I'm raising funding". Someone did this last year and got harangued for it. How can you crowdsource a funding round if you cannot do something that simple? Also, I would never invest in a convertible loan like that, and if you talk to a lot of investors (even angels) you'll find that a common sentiment. Investors hate convertibles. A few have told me that if you do those, it's not a question of if you're going to get screwed but when and how.
  - jacquesm 17y ago
    That's because twitter is a public forum and by asking it in that way you are effectively making a public offering. But mailing your buddies is a different matter. Think of it this way: there has to be some - minimal - pre-existing relationship between you and your target investors.
    - mattmaroon 17y ago
      Right, that isn't scalable, and it isn't crowdsourcing. Crowdsourcing is posting on HN "fund my startup". That's what I want.

jacquesm 17y ago

I think that as long as shares are to identified people the securities laws are pretty lenient. It's as soon as shares are traded publicly and 'to bearer' that you get in to the trouble zone. more reading: http://en.wikipedia.org/wiki/Accredited_investor http://en.wikipedia.org/wiki/Accredited_investor http://www.entrepreneur.com/money/financing/loansfromfriendsandfamily/article51542.html http://www.entrepreneur.com/money/financing/loansfromfriends... http://www.angelblog.net/Startup_Funding_the_Friends_and_Family_Round.html http://www.angelblog.net/Startup_Funding_the_Friends_and_Fam... It's definitely possible I think, if the funding is structured as a loan then there is no problem at all, if it is in return for equity you have to be a bit more careful but I don't think that it is a requirement that every investor is an 'accredited investor', especially not if the individual amounts are small enough. I'd certainly make sure that was 'non voting' stock, otherwise you have a real issue with share holder meetings right away, which (for instance) with 10 people supplying $1000 each would not be in relation to the investment.

mattmaroon 17y ago
You cannot even legally post on Twitter "I'm raising funding". Someone did this last year and got harangued for it. How can you crowdsource a funding round if you cannot do something that simple? Also, I would never invest in a convertible loan like that, and if you talk to a lot of investors (even angels) you'll find that a common sentiment. Investors hate convertibles. A few have told me that if you do those, it's not a question of if you're going to get screwed but when and how.
- jacquesm 17y ago
  That's because twitter is a public forum and by asking it in that way you are effectively making a public offering. But mailing your buddies is a different matter. Think of it this way: there has to be some - minimal - pre-existing relationship between you and your target investors.
  - mattmaroon 17y ago
    Right, that isn't scalable, and it isn't crowdsourcing. Crowdsourcing is posting on HN "fund my startup". That's what I want.