Spring In Equity Crowdfunding

This Month, it’s a year since President Obama signed the landmark JOBS (Jumpstart Our Business Startups) Act, one of the bills that’s set to introduce Equity Crowdfunding. This legislative changes will allowing any member of the public to invest in startups, currently possible only through a regulated IPO (Initial Public Offering) process. The new piece of legislation is expected to be used as a model for the rest of the world as well.

The US Securities Exchange Commission (SEC) was to have had the regulations in place by end December 2012, the stipulated 270 days since the passing of the bill last April. Now way past the deadline the SEC still continues to deliberate on the regulations, leading to some citing SEC could possibly overdo the legislation in its conservative approach – which defeats the purpose of the bill. However recent developments, especially the SEC’s ‘No-Action’ letter to a couple of firms have showed its keenness to easy regulation and enable funding from a larger pool. Here’s what the letter would mean:

So with Equity Crowdfunding expected to boom later this year, it’s time to look at what Crowdfunding thought-leaders have in mind. Many will be in Boston at the Thomson Reuters’ Innovative Investing Symposium 2013, an event part of the JOBS Act first anniversary. Among those present there will be promoters of Equity Crowdfunding legislations across the world, including those from Italy – which could ace the US with its legislative changes and implementation. We shall keep more than an eye on these and various other crowdfunding developments across the world. Feel free to reach out.