The debate about the impact of the JOBS Act, and especially the provision allowing equity crowdfunding, remains subject to debate, as the following recent articles show.
Equity crowdfunding will be subject to SEC regulations that include a requirement for audited financial statements in many instances, as well as on-going SEC reporting. Also, many Series A round investors have indicated that they would shy away from follow-on investments in an equity-crowdfunded company because there will be too many "small" investors and the extra costs involved.
In contrast, non-equity crowdfunding (such as a Kickstarter campaign) is not subject to SEC regulations. Contributors usually get a coffee mug, tee-shirt or early release of a product, but no shares.
For "investors", are they better off with a coffee mug and a thank you, rather than shares in a start-up saddled with the extra costs and issues identified in these articles? And, in a non-equity crowdfunding campaign at least you have another coffee cup or another tee shirt to show what you supported."
Also see my tweets:
Crowdfunding comes up short: Why the final part of the JOBS Act will never work http://gigaom.com/2014/02/19/crowdfunding-comes-up-short-why-the-final-part-of-the-jobs-act-will-never-work/ … via @gigaom - Another point of view!
Can the JOBS Act Save The American Dream? | Crowdfund Insider http://www.crowdfundinsider.com/2014/03/33195-can-jobs-act-save-american-dream/ … #crowdfunding via @crowdfundinside - Not w/out change.
Equity crowdfunding will be subject to SEC regulations that include a requirement for audited financial statements in many instances, as well as on-going SEC reporting. Also, many Series A round investors have indicated that they would shy away from follow-on investments in an equity-crowdfunded company because there will be too many "small" investors and the extra costs involved.
In contrast, non-equity crowdfunding (such as a Kickstarter campaign) is not subject to SEC regulations. Contributors usually get a coffee mug, tee-shirt or early release of a product, but no shares.
For "investors", are they better off with a coffee mug and a thank you, rather than shares in a start-up saddled with the extra costs and issues identified in these articles? And, in a non-equity crowdfunding campaign at least you have another coffee cup or another tee shirt to show what you supported."
Also see my tweets:
Crowdfunding comes up short: Why the final part of the JOBS Act will never work http://gigaom.com/2014/02/19/crowdfunding-comes-up-short-why-the-final-part-of-the-jobs-act-will-never-work/ … via @gigaom - Another point of view!
Can the JOBS Act Save The American Dream? | Crowdfund Insider http://www.crowdfundinsider.com/2014/03/33195-can-jobs-act-save-american-dream/ … #crowdfunding via @crowdfundinside - Not w/out change.