Equity Crowdfunding Wakes Up Goliath

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Healthy Crowdfunder | Tony Arias | March 31, 2014

Healthy Crowdfunder blog

Last year on June 19, 2013, we hosted our first crowdfunding meetup called  “Crowdfunding Reinvents the Old Stock Exchange” and late adopters ignored the equity crowdfunding word. Not this past week.

You know crowdfunding is going mainstream when the:

  1.  TMX Group, Canada’s most senior stock exchange recognizes crowdfunding as competition in its latest Management Discussion and Analysis (MD&A) for fiscal year 2013.
  2.  TMX Group  has announced they are operating a private marketplace following  NASDAQ OMX announcement on March 6th.
  3.  US SEC and FINRA are finally processing the public comments for the JOBS Act Title III which will effectively legalize crowd investing by non-accredited investors to virtually all kinds of private businesses through the internet.
  4.  Ontario Securities Commission  and other provincial securities regulator  joined the stampede this past week inviting the public to comment on their proposed crowdfunding rules until June 18, 2014.
  5.  Venture capitalists have injected more capital into equity funding platforms CircleUp $14 million   and Realty Mogul $9 million.

Furthermore, the US JOBS Act will facilitate a pipeline of companies remaining private until mature enough to go public

  1. Title II (after 80 years) finally allows businesses to solicit or advertise fund raising to accredited investors using various social media and traditional marketing channels.
  2.  Title IV Regulation A+ will allow companies raise up to $50 million “ lite IPO” or mini registration  and Title V will increase shareholder count from 500 to 2,000 before becoming a reporting issuer. See earlier blog Crowdfunding Is Better Than You Think

Related:

So what do all these news mean to you?

 Accredited or non-accredited, angels, other high net worth (HNW), or institutional investor, start looking for funding platforms that:

  • conducts a comprehensive due diligence and vetting of businesses using its platform
  • places a high priority on investor protection at optimal costs
  • recruits proven management with appropriate skill sets to partner with issuers
  • facilitates liquidity paths for investors prior to the bigger exit
  • experienced in best practices in corporate governance and investor relations with publicly listed companies
  • managed by people aligned with investors’ interest through co-investment

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