Previously, I highlighted a proposed Startup Exemption to Federal securities laws, which would allow small companies to “crowdfund” (i.e. raise small amounts of money as startup capital from a large number of participants over the internet). At the time, I thought that it was highly unlikely that anything significant would come of it. In today’s climate, where investment losses from 2008 are still fresh in the minds of policymakers, I thought it was unlikely that there would be any significant support for the loosening of financial regulations. I might have been wrong.
I saw the following statement on the White House’s web site: “As part of the President’s Startup America initiative, the Administration will work with the SEC to conduct a comprehensive review of securities regulations from the perspective of these small companies to reduce the regulatory burdens on small business capital formation in ways that are consistent with investor protection, including expanding “crowdfunding” opportunities and increasing mini-offerings.”
In addition, Republicans (unsurprisingly) are also getting on the bandwagon. Perhaps we may have a genuine area of bipartisan agreement here?
© 2011 Alexander J. Davie — This article is for general information only. The information presented should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.