The
SEC has made dramatic headway in terms of its eliminating the rule regarding public announcements ("solicitations") by companies of their intent to raise money through the sale of securities such as stock, bonds or other instruments. That bodes well for the U.S/ capital markets in general, and especially for smaller business, such as start ups, technology ventures and small businesses who wish to become capitalized through an initial public offering ("
IPO") or something similar.
By the same token, The SEC now has a firm deadline of mid-October by which it must promulgate its rules and compliance standards for smaller, i.e.,
crowd funded,
public offerings of securities over the internet. These are both great strides.
What troubles my colleagues and myself here at
CFI CrowdFunding Incubator LLC is that each state has its own securities governing body, generally under that state's attorney general's office, and each state is within its constitutional rights (assuming that the Constitution is still considered relevant by
someone in issuing its own individual laws and guidelines with respect to offerings of securities within its jurisdiction.
These "Blue Sky" - like laws will undoubtedly come cropping up like crabgrass in springtime as soon as the October announcements are made by the
Securities And Exchange Commission.
An article from a
CBS newsbrief follows to shed some further light on the issue:
Despite
hoopla over the JOBS Act, few believe that national crowdfunding is set
to take off -- and states aren't waiting around to find out  |
---------------
I strongly believe that each state's attorney general will want to have his or her respective say about its own "supplemental compliance rulings" to the JOBS Act. And because of this, interstate offerings, multi-state offerings and national offerings may require compliance with multiple sets of rules, which could be quite expensive (in terms of legal bills), and could make the SEC's rules almost irrelevant. There could even be some interesting legal challenges.
Yes. We are making great strides within
the US with respect to crowdfunded online offerings.
But the issue that remains is: What will the states, each respectively, do, in terms of helping with the process, or hindering it. Those of us at
The CFI Group Of Companies want to see legislation infused with the original spirit of the JOBS Act -- but whether or not the states' attorney generals will agree is a story yet to be told.
We will be keeping you up to date.
Douglas E. Castle, CEO
Tags, Labels, Keywords, Categories And Search Terms For This Article: JOBS Act, IPO, CFI, Crowdfunding,SEC, crowdfunded public offerings, business, raising capital, funding ventures, Blue Sky, Douglas E. Castle
- It Just Got a Whole Lot Easier to Fund Your Startup (wired.com)
- JOBS Act hasn't bolstered IPOs, execs say (smartbrief.com)
- Fantastic CrowdFunding Video by El Gastronomo Vagabundo (wellpreserved.ca)
- SEC approves advertising for hedge funds and private offerings (smartbrief.com)
- Private Funds Will Also Be Able To Engage in General Solicitations (securitiesnewswatch.com)
- SEC Lift Longtime Ad Ban For Private Offerings, Fund Raising (pehub.com)
- SEC loosens rules on raising venture capital and hedge fund advertising (mercurynews.com)
- Crowdfunding: Good News and Not So Good News (ugasbdcmetronorthga.wordpress.com)
- To Crowd Fund or Not to Crowd Fund (fibercompulsion.com) - A Sourpuss? You've
got to rally your own core of contributors to any crowdfunding party.
If you can't fill a batch of the seats with your own true believers,
while would someone else choose to jump in and be first? The thing that I
must say in support of this article is that the sad truth is that the
more eccentric that you are, generally speaking, the more likely it is
that you will pick up some "drive by" contributors. So much for a good
business plan and sensible presentation. It's 'bread and circuses' for
the masses once again. *****
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