Indiana Secretary of State Connie Lawson issued an advisory to spotlight issues for small businesses and entrprepreneurs seeking to raise investment capital through crowdfunding. The advisory reminds small businesses to wait until the Securities and Exchange Commission (SEC) finalizes crowdfunding rules before selling shares in their ventures to the public – until that time, securities law prohibits publicly accessible Internet securities offerings.
“Small businesses are important to the nation’s economic growth and the crowdfunding concept has the potential to provide legitimate small,innovative enterprises with access to capital that might not otherwise be available,”said Secretary Lawson.
The advisory notes that the JOBS Act only exempts crowdfunding equity offerings from securities law registration requirements.The requirements of federal and state securities laws regarding disclosures,including disclosures of all material facts and risks to investors,remains in place.“If you do not comply with these disclosure requirements,you and your business can be liable for securities fraud and subject to private lawsuits as well as administrative enforcement actions,”the advisory said.
Founded in 2010, the industry website, Crowdsourcing.org, is a neutral organization dedicated solely
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Crowdsourcing.org is recognized worldwide for its intellectual capital, crowdsourcing and crowdfunding
practice expertise and unbiased thought leadership.