Accredited Crowdfunding

This morning at 10 am Pacific the Angel Capital Association and VC Experts are presenting a 90 minute webinar, "Understanding the JOBS Act." If you haven't already signed up and are interested, I think you might be able to register using this page. Apologies if I am wrong about that.

I'll be participating along with Dan Rosen, Chair of the ACA Public Policy Committee (and also Chair of the Seattle Alliance of Angels); Joe Bartlett of Sullivan & Worcester and Chair of the ACA Public Policy Advisory Council; and Dan Hansen of Montgomery & Hansen and a fellow member of the ACA Public Policy Advisory Council.

We'll cover the IPO on-ramp; the lifting of the prohibition on general solicitation in private offerings that are limited to angels; the angel platform and incubator safe harbor; equity crowdfunding; Reg A; and the new shareholder number thresholds triggering SEC reporting.

Have a gander at the slide below.

Screen shot 2012-05-04 at 6.38.13 AM

This is a list of just some of the requirements that the new equity crowdfunding exemption (not effective yet; though the JOBS Act has passed, it clearly says that the equity crowdfunding exemption won't have effect until the SEC writes rules to implement it, and that will take at least another 8 months) will impose on this newly invented entity or category, the "funding portal."

I've been talking about the JOBS Act all week - Wednesday at the Northwest regional meeting of the ACA in Seattle, yesterday at an LSI seminar in Seattle - and one thing that is becoming a bit clearer to me is that the JOBS Act will be enabling crowdfunding all right, but not under the part of the law that everyone supposes.

The thought merits further development in future posts, but for now, just ask yourself, how will funding portals under the equity crowdfunding exemption possibly compete with the angel platforms and incubators, whose syndication and networking activities with accredited investors have no such laundry list of mandates and restrictions?

It makes me think further of a remark that Superangel Geoff Entress made at the LSI seminar yesterday: there may end up being an adverse selection effect. That is - and here I think we're talking tech and high growth ventures, not localvesting - the crowdfunding deals that the general public may find available will be the ones that can't get crowdfunded among angels. 

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