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In what way is crowd funding illegal now? I am assuming that is what the gentleman was implying with "legalize and regulate." Doesn't regulation of a 'crowdso
by frankydp 15y ago
In what way is crowd funding illegal now? I am assuming that is what the gentleman was implying with "legalize and regulate."
Doesn't regulation of a 'crowdsourced' anything, kind of defeat the purpose? The entire idea is that many small failures lead too faster successful iterations.
- joshu 15y agoCrowd donating is legal. Crowd investing is not; currently, investors must be accredited or qualified.
- dmix 15y agoI never really understood the reasoning behind accredited investors.
- anigbrowl 15y agoScam prevention.
- geoffschmidt 15y agoImagine those infomercials that run late at night on cable TV, except instead of selling dubious kitchen gadgets, they're selling equity in dubious social media startups to your grandmother.
- bravura 15y agoDoes anyone know what sort of crowdfunding is considered permissible, and what is not allowed, under the proposed legislation? I didn't see it in TFA, and googling "CROWDFUND ACT" didn't bring me the text of the bill. Ostensibly the line must be drawn somewhere. Is this only for "tech" companies? How is that defined? Is there a particular company structure that is dictated? Delaware S-Corp, or any state Corp/LLC?
- _delirium 15y agoImagine a world where everyone who thinks they're building "the next Facebook" can be matched up with regular people who want to invest in "the next Facebook"...
- Tuna-Fish 15y agoThe present rules came into force with the Securities Act of 1933, which was written during the great depression to protect people from the kind of predatory "investments" that caused a lot of people to lose their savings in the crash. The last part of the bubble in late 20's was characterized with the lower middle class, which previously didn't have much investments, getting involved with the stock market. A lot of companies of all sizes advertised their stocks and "expected returns" in everything from radio to milk labels. Too many people bought into it at the worst possible time, on the top of the bubble.
- kls 15y agoDoes anyone know of any sites that are positioned to take advantage of the investing aspect should the legality of it change? Are their any players in the space standing on G waiting on O so to speak.
- Kliment 15y agoIndiegogo and Kickstarter will likely be the first to jump on it. Indiegogo in particular seems interested, since a number of their customers are asking for this (they wrote an FAQ answer about it).
- deleted 15y ago[deleted]
- jedberg 15y ago> Crowd donating is legal. Crowd investing is not; currently, investors must be accredited or qualified. That's not actually true (otherwise you couldn't do a friends and family round). The reason a startup generally wants qualified investors is because the non-qualified ones can sue you if you they lose money, so it is in your best interest not to take their money.
- damoncali 15y agoMy understanding is that it's the solicitation that is prohibited. You can raise $1000 each from 50 people if you want, but the SEC won't let you "advertise" the offering on the internet. You also get into the whole accreditation mess, but that's sort of a different issue.