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Tag Archives: Jumpstart Our Business Startups Act

Equity Crowdfunding Investments Surpass $16 Million on MicroVentures Broker/Dealer Crowdfunding Platform

18 May

Equity Crowdfunding Investment Milestone Hit as MicroVentures Invests in Graphicly, SupplyHog, Kickfolio and Republic Project

By Robert Hoskins

MicroVentures announced that to date accredited investors have invested $16M in startups on their equity crowdfunding platform. With investments in 34 companies, MicroVentures has now invested more with legal, accredited investors than any other equity based crowdfunding platform. MicroVentures employs a crowd-sourcing process that enables the power of the crowd to decide which startups will receive investments in an effort to provide a higher probability of successful outcomes. Further, MicroVentures has a dedicated due diligence team that screens out companies that may have potential growth inhibiting challenges.

MicroVentures Reaches $16M in Equity Crowdfunding Investments

MicroVentures Reaches $16M in Equity Crowdfunding Investments

“As we patiently wait for the SEC to enact rules around the JOBS Act, we are utilizing traditional securities laws to connect startups with great investors. This is only possible as a result of our being one of the only registered broker dealer in the space. This is the first time ever that accredited investors have had the ability to invest alongside VC’s without taking major stakes and ending up with similarly diversified portfolios. However, we may find that the crowd does an even better job at picking winners,” said Tim Sullivan, CEO of MicroVentures. “We’ve reached a milestone that proves that our platform doesn’t just ‘work’ — but that there is significant demand from smaller investors to take part in this asset class.”

MicroVentures’ platform invests primarily in seed stage startups, but will participate in follow on rounds alongside the VCs throughout the life of a company. For example, visual book publishing platform Graphicly and rich media advertisement platform Republic Project have both received multiple investments from MicroVentures as they have continued to gain traction and required additional capital to accelerate their growth. Other investments include SupplyHog, a Tennessee-based company that operates a platform that streamlines the process for buying building supplies and material online, along with Kickfolio, the first foreign management team, who have created a platform that enables developers to run iOS app demos in a standard web browser.

“Our platform has created the opportunity for our investors to invest in everything from seed stage startups to huge companies such as Twitter and Facebook through secondary transactions. We’re giving investors the chance to participate and the transparency to make decisions in a way they have traditionally never been able to,” said Sullivan.

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Georgia Investors Get First Unaccredited, Equity-based Crowdfunding Investment Opportunity in the United States via Sterlingfunder.com

14 May

By Robert Hoskins

Unaccredited investors in Georgia will be the first Americans in history to begin investing in the equity-based Crowdfunding movement.  cMEcompete announced that it will be the first company in Georgia and the rest of the United States to issue equity through online crowdfunding to non-accredited investors. This means that any Georgia resident can go online and make an equity investment in a Georgia-based company quickly and easily through Sterlingfunder.com.

SterlingFunder.com George Unaccredited Equity-Based Crowdfunding Platform

SterlingFunder.com Georgia’s First Unaccredited Equity-Based Crowdfunding Platform

Until the federal government approved the JOBS act (Jumpstart Our Business Startups Act) a year ago, securities placement was governed by the SEC Act of 1933. The JOBS Act removes some of the constraints imposed by the SEC Act of 1933, yet the SEC has not yet implemented these changes. To give Georgians a head start rule makers approved The Invest Georgia Exemption in 2012 which makes it legal for non-accredited investors to make intrastate investments (Georgia resident investing in a Georgia company) through crowdfunding.

How is this different from Kickstarter, Indiegogo and AngelList? Kickstarter and Indiegogo provide crowdsourcing of non-equity contributions. AngelList requires all investors to be accredited and the transaction must occur through Second Market (not online).

“These are exciting times with state law makers removing barriers for startups,” says Dan Popovic, cMEcompete Founder. “Now it is time for Georgians to take advantage of this opportunity by investing in new Georgia businesses and fueling the State’s economic recovery. cMEcompete is proud to be the first platform for this historic opportunity.”

cMEcompete is a social platform for endurance events where participants discover like-minded communities, enroll, track accomplishments and get rewarded. With the growth of running/walking, cycling and triathlons, with over 35,000 such events in the US to choose from, we’ve identified a unique opportunity to create a social platform for organizations, clubs and individuals. Company and event sponsors provide the revenue stream and in turn receive increased brand awareness and increased engagement and participation.

“It’s a sound business model that has already proven to be very successful. The Atlanta BeltLine Running Series doubled participation and sponsorship rates in 2012 through the use of our platform,” says Jay Evans, cMEcompete co-Founder.

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Crowdfunding Expected to Drive Alternative Financing Market to More than $150 Billion by End of Year 2015

14 Apr

By Robert Hoskins

The TABB Group has released a new crowdfunding research report entitled “Capital Reformation: Alternative Financing and the Fate of Intermediaries,” which examines the emerging business models that are enabling smaller investors to provide short- and long-term funding for small- and mid-sized enterprises (SMEs) that account for over 99% of the companies in most economies.

Crowdfunding Expected to Drive Alternative Financing Market to More than $150 Billion by EOY 2015

Crowdfunding Expected to Drive Alternative Financing Market to More than $150 Billion by 2015

“Wall Street is no longer a protected class,” says Adam Sussman, a TABB partner, director of research and co-author with contributing analyst Deepali Nigam. “Intermediaries’ roles and business models are shifting, focusing on platforms, aggregation and agency, resulting in a reformation in how capital markets will function, with alternative financing stepping up.”

The new research study explores the intersection of the SME funding market and emerging alternative financing mechanisms. It reviews the causes of declines in the bank loan sector, the regulatory changes enabling new forms of financing and the impact of those changes on traditional capital markets intermediaries, including investment banks and exchanges.

TABB currently estimates that alternative methods have raised $47 billion for SME’s globally, but “this is a small fraction of the overall SME market,” says Nigam. Current regulatory and secular trends are expected to drive this market to over $150 billion by EOY 2015. At the heart of this capital reformation is a mechanism that allows investors to connect with each other and to the issuer, a trend called crowdfunding.

Under the new JOBS Act in the US, crowd funding allows a company to pool up to $1 million from investors without registering with the SEC, or up to $2 million if the firm provides the SEC with audited financial statements reducing costs for issuance, as long as they raise funds through a registered funding portal.

Limited in the US now to rewards- or charity-based projects, crowdfunding is a non-recourse, pre-payment mechanism, but its premise is to attract investors to different types of SMEs – start up, growth, expansion and rebirth. Different existing and emerging crowdfunding platforms serve different types of investing strategies, such as reward, debt and equity. The TABB report lists eight leading sites in the US, the UK, Germany and globally.

Alternative financing poses some of the same challenges to the primary markets that automated trading posed to the secondary market, Sussman says. In the secondary market, when transaction sizes shrunk and volumes exploded, automating the workflow became a necessity. “With alternative financing, it will be necessary to automate processes because liquidity will come from a very long tail of small investors, not a few large institutions. With a large number of very small initial offerings, an efficient, fixed-cost infrastructure will be critical.”

Capital reformation is necessary, in part, Sussman says, because the capital markets are perceived to have become too focused on the secondary market, i.e. trading, rather than the primary market where the actual capital is raised. “As the exchanges and other businesses focus more on the trading of prices instead of investing in and financing businesses, the long-term needs of investors and issuers have become a less attractive market for the entire financial services industry.”

To learn more about the Crowdfunding industry and startup local Crowdfunding community outreach programs, please join our free American Crowdfunding Center on LinkedIn.com or Meetup.com and don’t forget to follow us on Twitter. Both social media sites allow platform owners and crowdfunding campaign managers to post their news and press releases into the discussion forums.

This will help us find new and exciting crowdfunding stories to cover.  We are currently covering crowdfunding topics such as Business CitiesCommunitiesCrowdfunding PlatformsEducationFilm, Music, EntertainmentGames, VideosSocial GoodSolar, Renewable Energy and Software, Hardware, Technology Gadget crowdfunding PR campaigns.

Mary Jo White Senate Hearing Testimony Lists JOBS Act Crowdfunding Rules as 1st on SEC Agenda

11 Mar

Testimony of Mary Jo White

Nominee for Chair of the U.S. Securities and Exchange Commission

Before the United States Senate Committee on

Banking, Housing, and Urban Affairs

March 12, 2013

Chairman Johnson, Ranking Member Crapo, and Members of the Committee:

It is my privilege to appear before you today as President Obama’s nominee to be the thirty-first Chair of the Securities and Exchange Commission.

Mary Jo White Confirmation Hearing Chair of the U.S. Securities and Exchange Commission Before the United States Senate Committee on Banking, Housing, and Urban Affairs

Mary Jo White Confirmation Hearing Chair of the U.S. Securities and Exchange Commission Before the United States Senate Committee on Banking, Housing, and Urban Affairs

There is no higher calling than public service. As the United States Attorney for the Southern District of New York for almost nine years, I worked very hard on behalf of the American people investigating, prosecuting, and punishing those who committed crimes. From white collar criminals to terrorists – regardless of the complexity of the case or the identity of the defendant – we always strove to do the right thing and to vigorously enforce the law. Today, I am honored by the prospect of potentially returning to public service as the Chair of the SEC to help carry out its essential mission.

While I served as United States Attorney, our office worked closely with the SEC investigating and prosecuting violations of the federal securities laws by both companies and individuals. Through that experience, I became a strong admirer of the expertise, independence, and commitment of the Commission and its staff. I fully appreciate the critical role the SEC plays as the primary regulator of our capital markets and as a strong advocate on behalf of investors. Today, in the wake of the financial crisis and in the midst of implementing the substantial legislative mandates of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) and the Jumpstart Our Business Startups Act (JOBS Act), the SEC’s importance and scope of responsibilities are greater than ever.

If confirmed, I will vigorously embrace and carry out the SEC’s mission to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation. The SEC’s mission has a tri-partite mandate, but the component parts should not be viewed as in conflict with each other. It is the responsibility of the Chair and the Commission to take the long-term view, balance the objectives when necessary, and seek to fulfill all parts of its critical mission. Then, our markets can thrive and investors will be protected and benefit.

As was true when Chairman Schapiro was first before this Committee in 2009, this too is a crucial time for the SEC. Although the worst of the recent financial crisis may be behind us, none of us can be complacent – least of all the SEC, which has faced a number of its own challenges. Under the leadership of Chairman Schapiro and Chairman Walter, the SEC has made significant strides to strengthen its examination and enforcement functions, improve its capacity to assess risks, and enhance its technology.

Our markets, however, are continuously evolving, and the technology of today is most certainly not the technology of tomorrow. Fast-paced and constantly changing markets require constant monitoring and analysis, and when issues are identified, the investing public deserves appropriate and timely regulatory and enforcement responses.

I am acutely aware that the position of Chair of the SEC carries with it heavy responsibilities and many challenges. But I commit to this Committee and the American public that, if confirmed, I will work tirelessly and do everything in my power to effectively lead the SEC in fulfilling its mission. Let me very briefly highlight a few early priorities were I to be confirmed.

First, I would work with the staff and my fellow Commissioners to finish, in as timely and smart a way as possible, the rulemaking mandates contained in the Dodd-Frank Act and JOBS Act. The SEC needs to get the rules right, but it also needs to get them done. To complete these legislative mandates expeditiously must be an immediate imperative for the SEC.

With respect to rulemaking, rigorous economic analysis is important and should inform and guide the decisions that are made. Although challenging – particularly in the quantification of benefits – in my view, the SEC should seek to assess, from the outset, the economic impacts of its contemplated rulemaking. Such transparent and robust analysis, including consideration of the costs and benefits, will help ensure that effective and optimal solutions are achieved without unnecessary burdens or competitive harm. If confirmed, I would continue the efforts of the Commission to ensure that the SEC  performs robust analysis in connection with its rules and in a manner that does not undermine the SEC’s ability to carry out its mandate to protect investors and our capital markets.

Second, if confirmed, it will be a high priority throughout my tenure to further strengthen the enforcement function of the SEC – it must be fair, but it also must be bold and unrelenting. Investors and all market participants need to know that the playing field of our markets is level and that all wrongdoers – individual and institutional, of whatever position or size – will be aggressively and successfully pursued by the SEC. Strong enforcement is necessary for investor confidence and is essential to the integrity of our financial markets. Proceeding aggressively against wrongdoers is not only the right thing to do, but it also will serve to deter the sharp and unlawful practices of others who must be made to think twice – and stop in their tracks – rather than risk discovery, pursuit, and punishment by the SEC.

Third, the SEC needs to be in a position to fully understand all aspects of today’s high-speed, high-tech, and dispersed marketplace so that it can be wisely and optimally regulated, which means without undue cost and without undermining its vitality. High frequency trading, complex trading algorithms, dark pools, and intricate new order types raise many questions and concerns. Are they problematic for retail and non-institutional investors? Do they result in unnecessary volatility, or create an uneven playing field? Or do these modern-day features bring benefits such as efficiency, price reduction, and healthy competition to our markets? Do they do all of these things? The experts and studies to date have not been consistent or definitive in their observations and findings about whether and to what extent harm is caused by the current market structure and practices. There must be a sense of urgency brought to addressing these issues to understand their impact on investors and the quality of our markets so that the appropriate regulatory responses can be made. If confirmed, I will work not only to ensure that the SEC has the cutting-edge technology and expertise necessary to enable it to keep pace with the markets and its responsibilities to monitor, regulate, and enforce the securities laws, but also to see around the corner and anticipate issues.

There are, of course, many other important areas within the jurisdiction of the Commission: from money market funds to private fund advisers, from credit rating agencies to clearing agencies, from the appropriate standards and regulations governing the conduct of broker-dealers and investment advisers when providing investment advice to retail customers to how to make public issuer disclosures more meaningful and understandable to investors, to name just a few. If confirmed, I would focus on these and the many other challenges facing the SEC.

In conclusion, it would be my privilege and honor to work with the men and women of the Commission and this Committee to help carry out the SEC’s mission. Thank you for considering me to serve in this capacity and for the opportunity to appear before you today. I would be happy to answer your questions.

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