Crowdfund Investing – The Future of Startup Financing
21 Nov
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Startup Exemption is the name entrepreneurs Sherwood Neiss, Jason Best and Zak Cassady-Dorion created to describe their Crowdfund Investing (CFI) framework. The framework is an exemption under Regulation D Securities Offerings that would allow startups and small businesses to raise a limited amount of seed and growth capital from their social networks using SEC-registered websites. Their framework was the basis for the four Crowdfunding bills introduced in Congress and endorsed by the President. Their first bill passed the US House in November, 2011, 407-17 and the US Senate on March 22, 2012 as part of the JOBS Act with a vote 73-26. The path from idea to law in 460 days can be found at: www.startupexemption.com & www.legalizecrowdfunding.org.
Since the President signed the bill into law, they have started Crowdfund Capital Advisors, a strategy and technology consulting firm for investors, entrepreneurs, governments and NGO’s. They can be found speaking globally about the shift crowdfund investing is going to make, how it will spur entrepreneurship & innovation and create millions of jobs!
Tags: crowdfund investing, crowdfunding, HR 2930, investment, private equity, sec, Sherwood Neiss, small business, startups, venture capital
Whatever is good for the American Citizens, is wonderful for me, I’m glad to sign. Thank you Whoopi Goldberg for bringing us this information that is in need of an update on policy for small business.
I support this. It is a much needed change
To support innovation.
Hi Luxmi, yes, this change is needed to get capital flowing again!
How is this different from what Kickstarter is already doing?
Hi Dan,
What Kickstarter is doing is working with donations. All the money that goes from investor to entrepreneur on Kickstarter is strictly a donation. If the entrepreneur were to return any of the money (even the principal) then the SEC would consider it a security and they would have to do lengthy and costly registrations. We’re looking to get an exemption that would allow small businesses to raise money through the crowd and have the investor be able to make a return on their investment: a win-win for both parties involved.
Hi Dan,
Currently kickstarter only allows for donations (because of the SEC regulations). This can be good for the people raising the money but it still doesn’t help the investor to see a return on their money.
Been working on this for 2+ yrs and its just a matter of time now. There are many effective ways to do crowdfunding even through current securities regulations. I assume you have read the book “the crowdfunding revolution”
Is it just me, or is anyone else annoyed with the micromanagement of practically every move that we make.
The best most significant gains in life, and in business are often based on a series of failures that lead to them.
The fact that SEC even exists troubles me, and probably most of the people with an entrepreneurial spirit.
Once, long ago, someone lost money taking a chance on something that might have worked, but for whatever reason didn’t, Boo Hoo, and now we have a HUGE structure of protective “burons” (Trumps word).
Now these stuffy over bloated (massively expensive) structures, allege to protect us from ourselves by restricting the earliest (and necessary) forms of capital (peoples own capital mind you), from doing the IMMENSE good, that virtually ever other “agency” (the SBA comes to mind among others) CANNOT even imagine doing.
Here we sit like a bunch of frogs in the pot of boiling water, wondering what happened, instead of standing up to countless forms of meaningless nonsense, that prevents us from doing the simple good that we know to do in our hearts.
Doesn’t the simple clarity of their ineffectiveness merit the need for their demise, instead of ours?
Wasn’t it Jefferson that basically said that government that’s gone bad, needs to be corrected?
What ever happened to freedom?
I agree with you Rick. I love free market principles and political liberty. Civil governance has stifled growth for small entreprenuers and only true free market principles can kick start our economy again.
This is fantastic! I’m getting the word out now, to my network but I haven’t been able to find a deadline date to have this petition filled. Is there a specific closing date for comments and such?
Hi Trish, thanks for sending this out to your network. We don’t have any ‘strict’ deadline however, we are testifying on Capital Hill on May 10th. The more signatures we have by then the better!
I’m having trouble with the petition signing widget. After I submit the form it seams to just hang.
Sorry to hear you are having trouble with the petition Sean. Here is a link to the petition on Change.org: http://bit.ly/hQ2GXE
Let us know if you have any other questions. Thanks for your support!