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Crowdfunding bill passes in the House

thehill.com

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Re: Crowdfunding bill passes in the House

#2

Post by clavalle »

Sweet! I was hoping they would break this part out into its own bill.

This is true economic jet fuel. Most of the jobs package was not terribly exciting but when I came across this bit I truly got jazzed about the possibilities. I hope the SEC doesn't drag their feet after this is passed.

Even if we end up with a ton of failed companies from this and a lot of burned investors the individual risk will be low and the entrepreneurs that come out of the other side will be that much better the next time. It really opens up the game to a huge number of people that otherwise would not have much hope of even getting 'friends and family' seed money.

Re: Crowdfunding bill passes in the House

#5

Post by tptacek »

Huh. That would be a big change. I'm surprised I haven't seen more advocacy for it from HN.

A question, though: in a post-"crowdfunding" world, what would a "crowdfunded" round do to your prospects of getting venture capital down the line? Wouldn't it gnarl up your cap table? How long will it take to shake the legal intricacies of this out?

Re: Crowdfunding bill passes in the House

#6

Post by 100k »

phil wrote: post #4

On it's face, it sounds like the bill would also remove the accredited investor requirement in Anyone who understands this thing have a read on whether that is actually so?

That was my read too (due to what "crowd funding" brings to mind, e.g., Kickstarter). However, this does not seem to be the case. In fact, it only changes the rules about general solicitation.

"the prohibition against general solicitation or general advertising contained in section 230.502(c) of such title shall not apply to offers and sales of securities made pursuant to section 230.506, provided that all purchasers of the securities are accredited investors"

http://democrats.rules.house.gov/112/text/112_hr2940_txt.pdf

Re: Crowdfunding bill passes in the House

#7

Post by HistoryInAction »

Lukeas14 wrote: post #3

After actually reading the short article, NO it did not pass in the house. I'm not a legislative expert but it sounds like it passed through the rules committee and will be debated today and tomorrow. Crossing my fingers...

According to Majority Leader Eric Cantor, it passed the House: https://www.facebook.com/ericcantor/posts/10150453309005530

Re: Crowdfunding bill passes in the House

#8

Post by HistoryInAction »

100k wrote: post #6
phil wrote: post #4

On it's face, it sounds like the bill would also remove the accredited investor requirement in Anyone who understands this thing have a read on whether that is actually so?

That was my read too (due to what "crowd funding" brings to mind, e.g., Kickstarter). However, this does not seem to be the case. In fact, it only changes the rules about general solicitation. "the prohibition against general solicitation or general advertising contained in section 230.502(c) of such title shall not apply to offers and sales of securities made pursuant to section 230.506, provided that all purchasers…

There's the second bill, HR 2930, that concerns crowdfunding: http://www.gpo.gov/fdsys/pkg/BILLS-112hr2930rh/pdf/BILLS-112...

Re: Crowdfunding bill passes in the House

#9

Post by HistoryInAction »

phil wrote: post #4

On it's face, it sounds like the bill would also remove the accredited investor requirement in Anyone who understands this thing have a read on whether that is actually so?

As long as individual investments made are less than $10k: `(B) individual investments in the securities are limited to an aggregate annual amount equal to the lesser of-- `(i) $10,000; and `(ii) 10 percent of the investor's annual income;

http://www.gpo.gov/fdsys/pkg/BILLS-112hr2930rh/pdf/BILLS-112...

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