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The JOBS Act & Crowdfunding

Published on Nov 18, 2015

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PRESENTATION OUTLINE

CROWDFUNDING:

THE GREATEST THING SINCE SLICED BREAD OR HOAX?

GOOD INTENTIONS:

PRESIDENT OBAMA ATTEMPTS TO EASE REGULATORY BURDENS
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JOBS ACT

JUMPSTART OUR BUSINESS STARTUPS ENACTED 4-5-12
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KEY CONCEPTS:

Photo by Rami ™

LEGALIZES CROWDFUNDING:

CAN RAISE UP TO $1 MM FROM UP TO 2,000 PEOPLE
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THIS SOUNDS GREAT!

WAIT, YOU MEAN THERE IS A CATCH?

CROWDFUNDS CAN ONLY BE RAISED BY:

BROKER OR "FUNDING PORTAL"
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NO ADVERTISING!

BROKER OR FUNDING PORTAL MUST BE USED

MASSIVE REPORTING REQUIREMENTS

ANNUAL COMPLIANCE DOCS TO S.E.C.
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CROWDFUNDING TRAPS:

THE INVESTOR'S INCOME & NET WORTH LIMIT INVESTMENT $
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FOR NW/ INCOME

MAX INVESTMENT OF > $2K OR 5% NW/ INCOME
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FOR NW/ INCOME > $100K:

10% OF INVESTOR'S NW / INCOME NOT TO EXCEED $100K
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CONCLUSION: SYMBOLISM OVER SUBSTANCE

THERE ARE EASIER LESS RESTRICTIVE SOLUTIONS
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A BETTER WAY!

TO RAISE FUNDS FROM INVESTORS
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"EMERGING GROWTH COMPANIES":

CREATES NEW CATEGORY FOR COMPANIES WITH SALES
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"REG A" EXEMPTION RAISED:

INCREASES LIMIT FROM $5 MM TO $50 MM
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AND THE GAME CHANGER

THAT ELIMINATES AN 80 YEAR PROHIBITION

ADVERTISING IS OK:

REMOVAL OF BAN AGAINST GENERAL SOLICITATION
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GUIDELINES:

NOT A FREE FOR ALL - STILL SOME RULES

VERIFICATION REQUIRED:

ALL INVESTORS MUST BE "ACCREDITED"
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AN ACCREDITED INVESTOR:

HAS NW $1+ MM - INCOME $200+ K
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EXEMPT OFFERINGS:

RETAINS CATEGORY OF PRIVATE PLACEMENTS