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So I'm reading that there was a law passed in the US (JOBS Act) which had sections regulating crowdfunding, but I'm also reading that it's not in effect yet, so we're in a sort of limbo. Is everyone actually required to make disclosures to the SEC for Kickstarter campaigns prior to launching? Do we need to make reports to the SEC after? Do I need to hire a securities lawyer to handle this sort of stuff? I thought Kickstarter would be simple but now all this stuff seems complicated and the status of the rules seem to be in the air?
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Apr 29, 2014 23:52
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| # ? Apr 29, 2024 19:43 |
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IIRC those rules would be for crowd-based investing (crowdvesting?), wherein people who fund a company would actually be part owners. Kickstarter isn't like that, it's basically a hybrid donation/pre-ordering scheme.
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Apr 30, 2014 00:00
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As Cicero said, the rules that were changed to allow "crowdfunding" aren't about crowdfunding in the sense that you're used to. What changed was they opened the way for people who aren't what's called "accredited investors" (i.e. normal working poors like you and me) to put small amounts of money into a company in exchange for small chunks of equity. It's a way of selling stock without going public. Unless you're offering equity as a kickstarter reward tier, it has absolutely zero affect on crowdfunding sites like Kickstarter and Indiegogo. What you're doing there isn't really "crowdfunding," as the law sees it, but rather accepting non-tax deductible donations in exchange for knicknacks, like a shady telethon.
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Apr 30, 2014 06:49
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Thanks guys! I used some keywords from your responses and found a couple articles dispelling that myth as well. Thanks again! http://www.nwcorporatelaw.com/kickstarter-legal-guide/ http://www.entrepreneur.com/article/231085
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Apr 30, 2014 08:21
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So I can sell equity in my live forever company to old people as long as I don't raise more then a million bucks per year now. Sweet all I need is an audit and some phone representatives to let people know about the opportunity. Crowdfleecing!
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May 2, 2014 19:14
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| # ? Apr 29, 2024 19:43 |
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Yeah, if you had a boiler room organization you could probably raise a ton of money from old people who don't know any better for a startup that goes nowhere. I'm expecting a lot of Wolf of Wall Street type stuff to happen once the law goes into effect.
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May 2, 2014 22:54
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