Crowdfunding Lawyers News

What is the JOBS Act with Kendall Almerico

The JOBS Act is actually seven different bills combined and was signed into law April 5, 2012. The bills ranged from an IPO onramp to give emerging growth companies an easier way to get into the IPO market which was dying, to a law to fix regulation A which is a great fundraising tool. This fix was a mini IPO that small companies can do to raise a lot of money. There was also a rule to change private placement so that people could go online to raise money through private placements, instead of having to do that behind closed doors with customers and people you've already done business with.
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What is Crowdfunding with Kendall Almerico

Since 2013 crowdfunding has grown from a 7 billion dollar industry, to a 34.4 billion dollar industry in 2015. Just 2 short years the crowdfunding industry has quadrupled globally. A phenomenal growth, crowdfunding took the power of raising money out of the hands of Wall Street and put it into the hands of the people.
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What is Equity Crowdfunding with Kendall Almerico

Equity crowdfunding is where you are actually purchasing shares in a company, receiving stock or the right to purchase stock. If the company becomes successful and shows a profit, just as they would any stockholder, they would then share those profits with you.
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Title II of the JOBS Act with Kendall Almerico

JOBS Act Title II is what we consider “Accredited Investor Crowdfunding”, where you can offer private placements only to accredited investors online. An investor can read the documentation online and can invest through an online source.
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Title III Equity Crowdfunding Legal Overview

Title III, or regulation CF, is equity crowdfunding. Any sale, or offering by an initiator under a million dollars, can be done, but there are limits. No individual can invest, the greater of 2,000 or 5% of the net worth of the investor. If the annual income, or net worth of the investor, is less than 100,000, you are limited to the amount you can invest. If either of those amounts are above 100,000, you are allowed to invest up to 10% of your annual income. The FCC changed the law to say if both of your annual income and your net worth are equal to, or greater than 100,000 then you can invest up to 10%.
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Crowdfunding State Law Reemption, Financial & Regulatory Requirements for Issuers

One of the important parts of Title III regulation CF of the JOBS Act, is that it actually preempts state law. All state blue sky laws that involve the registration of securities are eliminated, but that doesn't mean you don't have to pay a filing fee for certain things. There are two exemptions where states can still charge fees. First, if your company is domiciled in a state, that state can charge fees. Second, if you are selling more than 50% of your stock in a state, then they can charge you a notice filing fee.
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