Wisconsin’s equity crowdfunding law, which was unanimously passed by the legislature and signed by Gov. Walker last November, officially took effect on June 1, 2014. Wisconsin is one of 11 states that has “taken matters into its own hands” by passing its own crowdfunding laws while the federal rules are still pending.
Many unsigned or independent music artists struggle to finance studio time, recording an album, touring the country or even promoting their music locally. The struggle can push some artists to treat their talents like a hobby or even give up the dream of performing professionally. Others work full- or part-time jobs to raise the money themselves while playing small gigs for little pay. Some industrious artists use crowdfunding websites to raise the capital necessary to fund their talent.
The advent of crowdfunding has led to some incredible feats of entrepreneurism—the realization of products, restaurants and services that may have never seen the light of day. It’s also led to one man raising more than $50,000 just to make some potato salad. The thing is, non-serious campaigns—or even serious ones that fail to make good on promises—could face repercussions.
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”).