It’s been almost a year since my last crowdfunding
update, and with the encouraging news that MicroVentures (a
combined equity crowdfunding platform and broker-dealer in the US), having
announced that accredited investors on its platform have invested $16 million
in 34 startups, I wanted to check back in to see where things stand on the
crowdfunding landscape.
Unfortunately, there has been little activity on the regulatory
side. The SEC failed to meet the deadline to create regulations that Congress
mandated it do as part of the JOBS Act in April 2012. Initial expectations had
been high and support had been overwhelming from both the public and private
sectors. The SEC released initial guidance shortly after the JOBS Act was
passed, and then followed up that guidance in the form of posting FAQs on its
website. Very little has followed, and, while new SEC Chair Mary Jo White has
made the framework her priority, no timetable has yet been set. The SEC
is also in the process of finalizing new rules to ease the restrictions on
public solicitations.
While the SEC continues to consider the interests of investors,
entrepreneurs, and third-party platforms, other agencies and organizations have
weighed in. In early 2013, FINRA published a Voluntary Interim Form for Funding
Portals, which provided an avenue for these intermediaries between investors
and issuers, to provide information to "develop rules that reflect the
funding portal community and its business." The JOBS Act requires funding
portals to be FINRA members. Further, there are many intermediaries and other
crowdfunding players who have tried to lobby Washington to finalize and publish
regulations – but with little effect.
Click here to read Darren Braham’s entire post on Prince Lobel’s Corporate Law blog.