[1] Inspired by the growth of non-investment crowdfunding, advocates see such exemptions as a way to spur innovation, economic activity, and small-business job creation, but opponents see such changes as invitations to fraud that will target unsophisticated investors.
After the campaign met its funding goal, SELC interns Aroma Sharma and Kathleen Kenney researched and wrote the petition, which lists the names of all of its financial supporters in the first footnote.
The lobbying group Startup Exemption, led by Jason Best, Sherwood Neiss and Zak Cassady-Dorion, proposed crowdfunding exemption caps of $1m for the total offering and $10k or 10% of income for each individual investment to the SEC in December 2010,[8] and in early 2011 to the Startup America initiative, which was launched by the White House to celebrate, inspire, and accelerate high-growth entrepreneurship throughout the nation.
As his initial inspiration for H.R.2930, McHenry points to the website BuyaBeerCompany.com, which launched in Nov 2009 and gathered over 5 million pledges for a notional group purchase of the Pabst Brewing Company before being shut down by the SEC.
The JOBS Act went through a number of amendments; the most significant of these was when the Senate replaced the H.R.2930 section with a version of S.1970 that was modified by raising its tiered individual investment caps to $2000, 5%, and 10% of income.
First, for those companies residing in one of the states where an exemption has been put into place, securities based crowdfunding campaigns can be run today, without the need for businesses to wait on the SEC's rule making process.
[26] Most of this cost is a consequence of the requirements for the issuers to have certified or audited financial statements, go through a FINRA registered broker/dealer or funding portal, and produce expensive disclosure materials for investors.
[32] Under the Illinois Intrastate Offering Exemption the Secretary of State has approved the application of VestLo as a registered crowdfunding portal effective August 2016.
Intrastate Crowdfunding works well as a first step for companies raising funding—most investors at this level are local to the business anyway—think of as a Friends & Family II (FF2) round.