While the regulators in the United States and Canada continue to doddle along in coming up with a simple and workable regulatory framework for equity crowd funding (it’s been over 2 years now), it is apparent that both the population and the market are more than ready for it.
Earlier this year, Kickstarter, the popular reward based crowdfunding site announced that it had passed the $1 billion dollar mark in terms of funded projects, all of which are for rewards only. Of this amount, over $660,000,000.00 came from Continue reading
There has been some debate amongst the North American investment community about whether the legalization of equity crowdfunding would unleash a new wave of clever fraudsters on an unsuspecting public. Recently, the Ontario Securities Commission (OSC) published newly proposed exemptions to become available to certain investors, including a proposed crowdfunding exemption. The proposed framework, which is likely to become law after a 90 day consultation period, seeks to strike a balance between protecting the public and embracing the inevitable investment paradigm shift to crowdfunding. The OSC has found a convenient middleman on which to place the burden of ensuring that offerings are in fact Continue reading
The Dynamics of Rewards v. Equity and Their Impact on Future Crowdfunding Campaigns
As we move towards the allowance of equity crowdfunding in North America and elsewhere, parties seeking to crowdfund ventures will want to give serious consideration to the dynamics and impact of offering rewards or an equity stake in the venture being funded. Going forward, for the reasons outlined herein, one expects that more and more, future campaigns will have a creative blend of both, depending on the project being funded.
Rewards of course can be Continue reading
Equity crowdfunding to mainstreet will result in a new challenge for private companies, namely effective shareholder relations. Admittedly, crowdfunded privately held companies will not bear the same continuous disclosure burden as is imposed on publicly traded corporations. However, a larger constituent of arm’s length investors will inevitably make greater demands for information on management than was otherwise the case with such closely-held companies. So as part of the crowdfunding preparations, management would be wise to consider how to effectively communicate with an onslaught of new investors.
While the regulators in North America doddle along trying to come up with ways to protect investors from themselves (it’s now been almost two years since the JOBS Act became law), here, in a nutshell, are 10 reasons why equity crowdfunding will become very popular among businesses and investors alike.
- Less expensive – Small and medium size enterprises will have access to a much greater pool of funding at a fraction of the cost of the traditional and the often time and expense consuming prospectus requirements Continue reading
“More gold has been mined from the thoughts of men than has been taken from the ground.”
Napoleon Hill – Think and Grow Rich
We are at a crossroads in North America. The issue is not innovation or what some would call intellectual capital. There is more innovation going on now than at any other time in human history. We have more access to more resources then any of us dreamed possible just a few decades ago. And it’s getting more robust by the day. We don’t lack talent, and we don’t lack ambition or aspiration. We have the ability to collaborate on a massive scale. To ferret out talent, wherever it may be. What our intellectual capital is starving for is working capital. Continue reading