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Is Crowdfunding the Future of Journalism?document
Crowdfunding Could Support Civil Rights Reportingdocument
Change Crowdfunding Lawblog
Scred: Open accounting and meaningful banking for communitiesdocument![Crowdfunding: What's Legal and When [Live Chat]](/images/resized//editorial_13431_780x0_proportion.jpg?1344539400)
Key details: Our next live chat with the leadership group working to develop a self-regulatory framework for the crowdfunding industry will begin at 9am PST / 12pm EST / 5pm BST on Monday, April 16. You can submit your questions for this panel of experts right now in the comments at the end of this post, or to eric.mack@crowdsourcing.org.
As a result of this week's live chat, the SRO working group learned that there is some confusion around whether and when platforms can charge a fee for facilitating crowdfunding. We invite you to join members of CFIRA's leadership group and our securities attorney's for next week's live chat to clarify this issue.
Specifically, platforms have the following abilities:
• Until July 4, 2012, platforms may not facilitate any form of "solicitation" or advertising of raises;
• From July 4, 2012 until January, 2013, platforms may only facilitate "Regulation D" offerings, must limit all offerings to accredited investors, and cannot charge a fee for that facilitation;
• After January, 2013, platforms may offer crowdfunding offerings (not Regulation D offerings), and may charge a fee to facilitate those offerings.
We will discuss this in more detail to answer questions you may have, and welcome you to our next Live Chat at 9am PDT / 12pm EDT / 5pm BST on 16 April 2012.
Please post any questions you have for this next Live Chat as comments to this post. We will field the questions during the session.
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Posted by Carl Esposti
My analysis and comment to the SEC regarding Crowdfunding closings fees is below and can on my blog at http://1billionangels.com/2012/04/12/crowdfunding-portals-should-be-allowed-closing-fees-my-comment-to-the-sec/. Please discuss.
Hi Kiran,
I agree with you - I think the SEC should be focusing less on driving the business model and more on ensuring transparency of all fees. Let the industry evolve. I actually think a better business model is to allow the portal to have a percentage of the shares in the company - much better aligning interests and likely dramatically reduces the projects presented.
Prior to Jan. 2013, can a Crowdfunding Platform initially build a community of donors / potential investors and entrepreneurs via the currently allowable Kickstarter-style "donation / reward" model -- with the understanding that, after Jan. 2013, future investors could choose to convert their rewards (used and/or unused) into actual equity (ie, shares) ?
Regarding Kiran's comment to the SEC:
I totally agree with Kiran. My understanding is that Funding Portals in the UK charge a $2000 upfront fee to cover certain expenses (and, I assume, provide some degree of profit) as well as a 5% commission on a successful fundraising effort. Those fees could go a long way towards the proper vetting of the companies seeking funding -- perhaps by a third-party like CrowdCheck.
I have a Broker Dealer, 1940 Act BDC, a 501C3 called More American Jobs and a PhD. I just discovered your web site last night and wonder how can I help you and move forward to my goals?
George
It's helpful when dealing with regulatory rules to have some sort of document to reference. Can a wiki space be set up for this purpose?