Post Rally Update – Progress and Backlash by Special Interests
Dear Crowdfund Investing (CFI) Followers,
The rally was a HUGE success. How do we know? The regulators have launched a full-frontal assault against us in the Senate and are trying to kill Crowdfund Investing for good in the next 6 weeks. Here’s what you need to know in 3 sections: 1) What you can do now, 2) What’s happening next week (SENATE HEARING Dec 1st!) and 3) Highlights from last week:
WHAT YOU CAN DO NOW:
o Click this link to identify your Senators, call them and tell them “I support HR2930, the Crowdfunding Bill as a solution to getting capital flowing to community entrepreneurs so that we can create jobs!” It may sound crazy but grass roots calls are powerful.
o We need your financial support to help offset the mounting costs (travel, marketing, additional rallying, etc.) of getting the message to the Senate.
o We need you to recruit other supporters! Please send this to your friends, family and community and say, “I NEED YOU TO HELP ME STOP THE REGULATORS THAT REFUSE TO JOIN THE INTERNET AGE. WE HAVE A SOLUTION TO THE JOBS CRISIS BUT THE REGULATORS ARE STAGING A TURF WAR THAT DRAMATICALLY HINDERS ENTREPRENEURSHIP. ONLY THE VOICE OF THE PEOPLE CAN CHANGE THE LAW TO MAKE IT EASIER FOR ENTREPRENEURS TO ACCESS CAPITAL, INNOVATE, AND HIRE AMERICANS!”
WHAT’S HAPPENING NEXT WEEK:
o The Senate Banking Committee is holding a hearing on December 1st for which they still haven’t guaranteed us a seat at the table (crazy how you can bring this stuff to Washington and not be included in the hearing on the subject).
o We plan on hosting a luncheon for Senate Staffers the beginning of December to walk them through how CFI works and answer any questions/fears they might have about letting entrepreneurs raise capital from their social networks.
o We MUST push for a vote before the end of the year! If we do not get a vote by the end of 2011, it is unlikely the laws will change because next year is an election year.
- NPR, The Wall Street Journal and Fast Company covered the event. Much thanks to everyone who came to the rally, everyone who sponsored the rally and Representative McHenry & Maloney for speaking at the rally.
- We confronted our most vocal opponents at the SEC Small Business Capital Forum.
o Heath Abshure (Arkansas Securities Dept.) told us while they are in favor of crowdfunding (funny how this isn’t what he says in the media) their number one concern is ‘investor protection’ and market confidence.
o We responded with 2 questions that fell on blank stares:
1) If investor protection is so important, why haven’t they brought anyone to justice for the 2008 financial meltdown?
2) If fraud leads to the collapse of the markets due to lost confidence, why haven’t the financial markets ceased to exist with the 2008 financial meltdown?
o NOTE: If the broader markets are where the fraud is being perpetrated why isn’t the SEC focusing their energies on combating and stopping fraud there while letting the crowd take over in their community?
- We met with 9 Senate offices.
o Republicans are in favor of the legislation from a Jobs perspective and cutting the bureaucratic tape which inhibits access to capital for entrepreneurs.
o Democrats (including the President) are in favor of Jobs and democratizing the financial market so that not only the rich are allowed to participate.
o Both sides understand that the Internet has fundamentally changed the way we do business and hence it only makes sense that it should change the way we also do financing in the future.
- HOWEVER, State Regulators and special interests are throwing a full-frontal assault to stop our progress and KILL CROWDFUND INVESTING.
o They are using nonspecific cases of fraud to halt our progress because fraud, like sex and war, sells newspapers.
o They are doing this because they think we are encroaching on their territory and money.
o They are detracting from the conversation (JOBS via access to capital) without taking time to understand the advances in technology, the Internet, and how social media has led to transparency and accountability.
o They want you to think there will be millions of cases of fraud when the bigger issue is failure. The hedge against failure is portfolio diversification.
o Less than 40% of CFI ideas will ever be funded, and those that are funded, will be by people who know the entrepreneur (true investor protection at work).
o They want you to focus on fraud because they don’t understand that Crowdfund Investing is based on many-to-many communication between an entrepreneur and many investors in a open dialog as opposed to one-to-one fraud.
o They want to distract you from the benefits of this bill because they know that January 1st starts an election year and this bill will die if it isn’t passed into law before then and focus shifts to election politics.
Entrepreneurs, ideas, capital, businesses and jobs. You can have many entrepreneurs with thousands of ideas but you’ll NEVER HAVE ONE BUSINESS NOR JOB WITHOUT CAPITAL. We need to pick up where Wall Street and the Banks have left off. The Regulators are standing in the way simply because they don’t stand to earn a commission. Join the cause. Spread the word and let’s get Joe the Entrepreneur back to Innovating so that we can create JOBS and get us out of this recession!
Sherwood, Jason & Zak