Trying to understand how the current crowdfunding bills in front of Congress differ among each other? We put the following table together to explain the differences:
 From the Startup Exemption Framework, February 2011
 Limited to SBA Definition of Small Business, No public companies, no foreign companies, no investment companies
 Written testimony of Jack Herstein, President of NASAA (association of state securities regulator).
 $2,000,000 if issuer has audited financials
 Per investor, per year
 Whichever is lower
 Anyone can invest up to $500/entrepreneur & $2,000 aggregate per year, If you make over $50k/year then 1%/company & 4% aggregate, if you make over $100k then 2%/company & 4% aggregate
 We describe intermediary as a crowdfunding website, NASAA may think of it more as a broker/dealer that needs to be regulated
 Fraud check, Listing service, education component, communication platform
 Active intermediaries are registered broker/dealers, Passive intermediaries do not offer investment advice or recommendations, solicit purchases, sales, or offers to buy the securities on its website or portal, compensate employees, agents, or other third parties for such solicitation or based on the sale of securities on its portal, or manage investor funds or securities.
 Exempt from State filing in exchange for a ‘one-touch filing;’ aka a standard dataset required by entrepreneur and to be submitted to SEC and State regulatory bodies. Dataset includes: First Name, Last Name, Street Address, City, State, Zip, Phone Number, Social Security Number, Date of Birth, Fraud/Background Check Results, Company Name (even if unincorporated/just an entrepreneur), Amount of money attempting to raise via this round of CrowdFund Investing, Business/Idea Description, Number of employees, EIN # – if incorporated, State of incorporation (if applicable), CFI Platform Unique Identifier (numeric field)
 undecided as to state pre-emption
 The issuer must provide the home state with contact information and other basic information about the company, and the home state will share the information with other states upon request.
 Notice to commission including aggregate amount and number of purchasers
 Prior to using these platforms, investors will have to agree using current standard Captcha verification technology that they understand there is no guarantee of return, that they could lose their entire investment and that their liquidity/return is limited to any dividends, sale, public offering or a merger of the company.
 Warns investors, including issuer’s website, of the speculative nature generally applicable to investments in startups, emerging businesses, and small issuers, including risks in the secondary market related to illiquidity.
 Complete information about the risks, obligations, benefits, history and cost of offering.
 answers questions demonstrating an understanding of the level of risk generally applicable to investments in startups, emerging businesses, and small issuers; an understanding of the risk of illiquidity
 To inform investors the issuer must make basic disclosures on its website, including its business plan and proposed use of proceeds.
 To be modeled on disqualifications to be added to Rule 506 of Reg D per Dodd-Frank
 Individuals and companies that have criminal records or have violated securitites laws will be precluded from using the exemption