This is huge! Imagine if this existed during the time when Facebook was becoming a big deal and individuals could invest in it. Imagine, for example, if instead of that $2.5B pre IPO cashout going to one single investor it got distributed amongst 50,000 investors. That would $50K for each at a 1000 fold ROI. $50K is most people's yearly income =)
It's great that the SEC is moving forward with implementing the JOBS Act, but sadly what the SEC voted on isn't a good fit for startups and small businesses. It's more of an "IPO-lite" and for the most part only makes sense for companies that are a year or two away from going IPO.<p>On the upside, the "good stuff" from the JOBS Act (Title III) should be implemented by the end of the year.
I'd like to launch a campaign for my startup users to have the possibility to participate in our seed round. Is there a website/service that can help with that ( something that could work like kickstarter )? AngeList and others are not really designed for this use case (at least there is nothing publicly available NOW)
So, honest question, isn't public investment in shaky tech companies exactly what led to the early dotcom bubble?<p>Except now that it's before they even IPO, isn't it even more risky?<p>Genuinely curious, I was only 13 in 2000, so I didn't exactly know what was going on.
I'm completely in favor of individuals being able to invest in startups, especially since you can go to vegas and blow $30k in a weekend, to not be able to put $30k into a startup is a crime.<p>But this is going to make a bubble. IT will take a couple years to shake out, but I sure hope that as a result of this the change isn't reverted.<p>Yes, people will invest their money poorly, but nobody could do as bad as Social Security which in my grandfathers case, returned less than %3 fair value of his money (Eg: effectively a %97 loss[1]. Slot machines only produce a %98 loss!) And nobody has the option to avoid "investing" in social security.<p>[1] compared to putting the money in an index fund. At the time of calculation, the indexes had just crashed with the market, so the actual results %90 of the time would have been much more in favor of individuals.
I'm more interested in the Title III changes supposedly coming down the pipe, where you can file regulation D and then raise up to $1m from non-accredited investors, but <i>engaging in general solicitation.</i><p>This would be absolutely killer for independent films, which are badly in need of a financial boost at the bottom end of the market, and which in many ways resemble a specialized startup. On the negative side, they don't have a recurring revenue model of the same sort as a traditional product or service. On the positive side, the business process/manufacturing path of a film is very well understood.<p>Right now, some films are successfully crowdfunded. It works very well for documentariesthat address a topic which already has a dedicated interest community, and some kinds of fictional projects eg <i>Super Troupers 2</i> met its $2m funding target in something ridiculous like 48 hours. But crowdfunding is <i>very</i> heavily geared towards projects that have a pre-existing audience, sometimes through participation of a Famous Person. If you're trying to launch a film from scratch it's way harder, and it's harder again if you're not targeting a very specific demographic (which is why you see a disproportionate number of LGBT films on crowdfunding sites - it's a demographic that is underserved by Hollywood and one that's easy to connect with from a marketing standpoint). Paradoxically, the less money you are looking for, the more difficult it can be.<p>Small indie films already go down the regulation D route - pre-filing with the SEC, and then raising production/marketing costs through a combination of presales to distributors and by offering a limited number of equity blocks to accredited investors. But this is very very time-consuming. There are things like tax incentives to help, but they require a lot of administrative overhead and are more targeted at mid-sized projects from established producers, eg California tax incentives require a minimum budget of $1 million, presumably so to make the state's administrative overhead worthwhile.<p>It would be a huge change for indie films to be able to do general solicitation for sub-$1m budgets, and offset the lack of brand identity by offering investment participation instead, notwithstanding the high risks involved. Unfortunately, it looks like there won't be any movement on this before October of this year, meaining the earliest that Title III crowdfunding will take off is in 2016, nearly 3 years after the final implementation deadline set out in the 2012 legislation. I don't know if this is the fault of the SEC itself or if the agency is too underfunded to go any faster, but it's quite frustrating for those of us who'd like to raise capital int he micro-equity space.<p><a href="https://fundwisdom.com/article/brian-thopsey/title-iii-equity-crowdfunding-update-nonaccredited-investors" rel="nofollow">https://fundwisdom.com/article/brian-thopsey/title-iii-equit...</a>