Crowdfunding Law Will Turn the Start-Up World Upside Down

Crowdfunding Law Will Turn the Start-Up World Upside Down by Tim Rowe.

Remember that special moment when we all realized that the Web was going to remake yard sales and auctions, but we didn’t know yet who was going to win? (And then eBay left the rest in the dust?)
Such a moment has come again, and with a choice prize: Investing in start-ups. The House has already passed crowdfunding legislation, by a whopping majority. The president supports it. Senators on both sides of the aisle (Merkley, Bennet, and Brown) have agreed on a version. Entrepreneurs are signing petitions to support it. And there is speculation that the Senate Majority Leader Harry Reid may push for passage of the House bill as-is. This could be law overnight.

What would this mean? It would mean start-ups can “go public” from the get-go. Fasten your seatbelts. This is Kickstarter on jet fuel. Under the House rules, any start-up can publicly announce that it’s raising capital (on Facebook, or even in the local paper), and can raise up to $1M each year. That’s enough for lean start-ups to go many times around the track. Individual investors can invest up to 10 percent of their income. And there is very little paperwork required.

Everybody likes the innovation and jobs that this could propel. Detractors are understandably concerned about fraud.


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4 Comments

  1. If these folks are supporting it, you best carefully read & then re-read the bill. They do nothing that isn’t for the benefit of the government

  2. @simon – benefiting people and government is possible 🙂

  3. This joint rewrite bill has some nasty stupid additions. Trust government to take a good idea and screw it up (and thats about all we trust them with) …

    source blog of William Carleton: an experienced securities attorney specializing in start-ups, an attorney who was a panelist on the subject of the proposed changes last week at the Angel Capital Association Conference last week in Austin

    http://www.wac6.com/wac6/2012/03/to-join-forces-with-merkley-brown-gives-too-much-ground-on-crowdfunding-exemption.html

  4. it seems possible that a government can use good ideas and not always screw them up 🙂 if the makers out there want to change things we really can’t have an anti-government vibe folks – pt

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