Pick a crowdfunding exemption. Any crowdfunding exemption?By http://profile.typepad.com/1237764140s22740 // January 31, 2012 in Crowdfunding, Startup America
The AP reports that President Obama will endorse or propose a package of pro-startup legislation. Today.
The package will draw upon, among other elements, the Startup Act and the American Growth, Recovery, Empowerment and Entrepreneurship (AGREE) Act. Those Senate bills are grab bags of tax incentives, regulatory reforms, and new visas for immigrant entrepreneurs. (The Startup Act would make permanent a 100% exclusion on captial gains from qualified small business stock held for at least five years; it's a great idea, though query how the President is going to square it with electioneering against Mitt Romney's tax bracket.)
The Congressional bills are H.R. 2930, S. 1791, and S. 1970.
In many respects, H.R. 2930 (hereinafter, the "McHenry bill"), passed by the House with unseemly unanimity, is the best and most obvious choice. Back in November, the President lent timely support to the McHenry bill with this statement.
S. 1791, introduced by Senator Scott Brown, is also viable. This is the bill being supported by the Wefunders petition (which came to my attention because it drove a ton of traffic to my site yesterday). Wefunders appears to be in the business of being a platform, so it may make sense that they support the Brown bill, which requires use of an intermediary.
S. 1970, introduced by Senator Merkley, is the crowdfunding bill that represents no crowdfunding exemption at all.
The optimum crowdfunding exemption may be a mix of the McHenry bill and the Brown bill. I like what Paul Spinrad said in a responsive comment under his own post on BoingBoing last night:
"I think H.R.2930 is right to not require an intermediary-- that's important, a small local non-tech savvy business shouldn't have to go online. But I like the lower individual investment cap of $1000 better in S.1791 -- I think $10K / 10% of income (H.R.2930) is way too high to start this new legislation out with."
I'll have to do some more thinking before I give up on the idea that a platform is the best way to bring accountability to the issuers, but I hadn't before appreciated the point that some businesses may not know how to deal with the internet.
Note as I'm just about to hit "publish" at 7:02 AM Pacific: Check out this post by Instagram co-founder Mike Krieger on the White House blog. Among other things, Krieger talks about progress toward making it easier for immigrant entrepreneurs to establish themselves in the US.
Update 10:44 AM Pacific: The White House has issued a press release, stating that "The President is calling for a national framework that allows entrepreneurs and small businesses to raise capital through 'crowdfunding.'”