11–20 of 31 posts
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.
Crowd donating is legal. Crowd investing is not; currently, investors must be accredited or qualified.
Earlier quoted context omitted.
Crowd donating is legal. Crowd investing is not; currently, investors must be accredited or qualified.
I never really understood the reasoning behind accredited investors.
Earlier quoted context omitted.
I never really understood the reasoning behind accredited investors.
Imagine 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.
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?
I also wonder how this would impact wider disclosure requirements. From what I've read, you can only have so many private investors (500?) before you are required to provide enlarged financial statements. Apparently it's one of the reasons Facebook needs to IPO--too many stockholders. If this law isn't modified in this bill--you'd have small companies who had to spend tons of resources to comply at a very young age.
Earlier quoted context omitted.
I never really understood the reasoning behind accredited investors.
Imagine 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.
I thought the way VCs worked is that most of their investments go bust, while a few percent do absurdly well. How do you "minimize the risk of ... loss" for people who supposedly can't afford it, by giving them access to something even professionals usually lose money on?
This is an alternative to the "detailed disclosures" the SEC requires now, the way that's presented makes it sound like this requires less detail.
Is this because more people want to directly invest in startups, or because startups have a hard time getting funding the way things are now? Either way it sounds a bit bubbly...
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.
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.
- Minimally regulated so that it is easy to get money, but then full of scams.
- Heavily regulated so that it is hard to get money, which makes it not much better than the current system.
I'd love to see smaller investors able to invest in startups, but it just seems like a bad idea to let any old person invest.
Can someone convince me I'm wrong?