It has been more than two years since the JOBS Act was passed and almost nine months since the SEC proposed crowdfunding rules — but still no final rules.
As we have previously discussed, the Ontario Securities Commission recently proposed a crowdfunding prospectus exemption aimed at facilitating greater access to capital through the exempt market, particularly for start-ups and small and medium-sized enterprises (SMEs).
Every so often we get calls from companies either in the process of raising funds on Kickstarter or just having completed their Kickstarter fund-raising.
The JOBS Act’s crowdfunding provisions were once one of the most eagerly anticipated items contained in that Act. Many companies and their advisors had high hopes that these crowdfunding provisions would open up new arenas for financing smaller companies while easing the costs and challenges associated with securities regulatory compliance.
Crowdfunding has become a popular new way for entrepreneurs, small businesses, and philanthropists to raise capital by obtaining small contributions from a large number of individuals over the Internet.
The announcement of Facebook’s acquisition of Oculus VR is a great starting point to explore the current state of crowdfunding.
The new crowdfunding provisions in the “Jumpstart Our Business Startups Act of 2012” have received a lot of attention, including a piece on this blog earlier this month: Title III of the Act exempts certain crowdfundings from the registration requirements of the federal securities laws (the “Federal CF Exemption”), and the U. S. Securities and Exchange Commission issued proposed regulations in October 2013 to implement the exemption (the “Proposed CF Regulations”).
In late April, the Texas Securities Board issued proposed regulations that would allow crowdfunding in intrastate transactions in Texas.
Many startup companies want to change the world with their great new ideas – but, in an effort to raise funds, some jeopardize their ability to protect those great new ideas with patents.
In its March 20, 2014 proposals for four new prospectus exemptions intended to facilitate capital raising for businesses in Ontario, the Ontario Securities Commission (OSC) proposed a crowdfunding prospectus exemption (the “Crowdfunding Exemption”) aimed at facilitating greater access to capital through the exempt market, particularly for start-ups and small and medium-sized enterprises.