SEC puts a $2000/person limit on crowdfunding projects (ie: Kickstarter.com)

[JEDI]

http://finance.fortune.cnn.com/2013/10/23/sec-finally-does-its-job-on-crowdfunding/

•A company can raise a maximum of $1 million via crowdfunded offerings over a 12-month period.
•Investors can invest up to $2,000 or 5% of their annual income of net worth, whichever is greater, over a 12-month period (if either their net worth or annual income is below $100,000).
•Investment companies would be ineligible to use crowdfunding.
•Securities purchased via crowdfunding can not be resold for one year, except back to the issuer.
•Issuers would be required to submit certain information to the SEC, including about the company's financial condition, which would be publicly-available. Issuers also would be required to file annual reports with the SEC.
•Intermediaries would be required to provide certain investor education information, and take measures to reduce the risk of fraud.

the problem? this is already law by the JOBS Act legislation signed by President Obama in March 2012.

so basically people/companies were breaking the law and the SEC wasn't enforcing it?

whats different now? a new head of the SEC.


Will this make any difference?
I would say no.

you're going to have a rich 1% creating a kickstarter campaign to have people foot the $50k/yr bill for her daughters nursery school.
And there will be fools who will fund it.

I see nothing wrong with it. it's the fool's $.

but I don't see these SEC rules making any diff in crowdfunding.

This is about equity crowdfunding which has nothing to do with kickstarter projects.
admin allisolm

 

[rudeguy]

wrong forum

 

[SunnyD]

Wait, nm, I read it wrong.

 

[purbeast0]

its $2k or 5% of their annual income. so for everyone on atot it's $5k minimum.

kickstarter is retarded for the most part and people who fund it are retarded for taking the risks that a business should be taking, except you are taking the risk without even having the product. don't think i will ever support one.

 

[SunnyD]

I dare say, shouldn't campaign fundraising be classified as "Crowdfunding"?

I'd laugh at the $1,000,000 limitation slapped on candidates. That'd be epic.

 

[lxskllr]

Lame. More freedom of choice being taken by big brother. Kickstarter isn't an investment tool. It's organized panhandling. The SEC shouldn't have jurisdiction.

 

[vshah]

star citizen raised 22+ mil over the past year. this would not be good for crowdfunded AAA games.

 

[ElFenix]

Lame. More freedom of choice being taken by big brother. Kickstarter isn't an investment tool. It's organized panhandling. The SEC shouldn't have jurisdiction.

i'm not sure the SEC actually does anything worthwhile and i dont support it doing this either.

 

[KB]

The rules spelled out by the SEC are for equity crowdfunding, not development cost crowdfunding like kickstarter. Equity crowdfunding is a bit more complicated as you need to divy out ownership (shares) in the company when you crowdfund it, and so the SEC has jurisdiction on it.
I think their rules for investors seem arbitrary, but its good they are looking out for it. The stock market has enough fraud, I can't imagine how much fraud equity crowdfunding might have.

 

[Crusty]

You guys are all wrong, except for KB.

This is for EQUITY based crowdfunding. Not rewards based crowdfunding. There's a huge difference.

You are giving out shares of your company in return for crowdfunding style fundraising(all or nothing). That is why the SEC wants to regulate it.

 

[Capt Caveman]

You guys are all wrong, except for KB.

This is for EQUITY based crowdfunding. Not rewards based crowdfunding. There's a huge difference.

You are giving out shares of your company in return for crowdfunding style fundraising(all or nothing). That is why the SEC wants to regulate it.

The OP posted it incorrectly not understanding what he read, like usual.

 

[IEC]

Star Citizen has raised 24,000,000 in less than one year through crowdfunding. If politicians can crowdfund, why can't companies?