What the venture
capital community and angel investors need to understand is this: equity
crowdfunding does not compete with traditional early stage investment channels,
nor is it an elaborate ruse to pilfer hard earned money from unassuming
Americans. It enables people—whatever they look like, whatever their
background, wherever they reside, whatever their resources—to make their pitch
to those people who know them and/or their idea best, instead of to just a
handful of risk-averse institutional investors. It will even help venture
capitalists vet opportunities and fill in the funding gap for entrepreneurs who
face financial purgatory between the conception phase of a startup and the
Series A funding rounds. Ultimately, it will bring massive efficiencies to our
archaic system of startup and small business investing to the mutual benefit of
entrepreneurs, investors and consumers.
With Mary Jo
White set to be confirmed as chairwoman of the SEC, I remain hopeful
that the rules for Titles II and III of the JOBS Act, which govern equity-based
crowdfunding, may be released later this year. In her testimony during
confirmation hearings, she said: “I would work with the staff and my fellow
commissioners to finish, in as timely and smart a way as possible, the
rulemaking mandates contained in the Dodd-Frank Act and JOBS Act.” Her verbal
support for equity crowdfunding, going as far as calling the legislative
mandates an “immediate imperative for the SEC,” is certainly a positive sign. Read more
