Crowdfunding bill passes in the House

http://thehill.com/blogs/floor-action/house/191669-bills-easing-sec-rules-advance-in-house

by uripom • 15 years ago

66 20 15 years ago

clavalle2• 15 years ago

Sweet! I was hoping they would break this part out into its own bill.

This is true economic jet fuel. Most of the jobs package was not terribly exciting but when I came across this bit I truly got jazzed about the possibilities. I hope the SEC doesn't drag their feet after this is passed.

Even if we end up with a ton of failed companies from this and a lot of burned investors the individual risk will be low and the entrepreneurs that come out of the other side will be that much better the next time. It really opens up the game to a huge number of people that otherwise would not have much hope of even getting 'friends and family' seed money.

nobody31• 15 years ago

We will end up with a whole bunch of pyramid schemes advertised on lamp posts that use this as a way of separating idiots from their money

Lukeas14• 15 years ago

After actually reading the short article, NO it did not pass in the house. I'm not a legislative expert but it sounds like it passed through the rules committee and will be debated today and tomorrow. Crossing my fingers...

HistoryInAction3• 15 years ago

According to Majority Leader Eric Cantor, it passed the House: https://www.facebook.com/ericcantor/posts/10150453309005530

phil2• 15 years ago

On it's face, it sounds like the bill would also remove the accredited investor requirement in <$1m angel rounds.

Anyone who understands this thing have a read on whether that is actually so?

100k2• 15 years ago

That was my read too (due to what "crowd funding" brings to mind, e.g., Kickstarter). However, this does not seem to be the case. In fact, it only changes the rules about general solicitation.

"the prohibition against general solicitation or general advertising contained in section 230.502(c) of such title shall not apply to offers and sales of securities made pursuant to section 230.506, provided that all purchasers of the securities are accredited investors"

http://democrats.rules.house.gov/112/text/112_hr2940_txt.pdf

HistoryInAction3• 15 years ago

There's the second bill, HR 2930, that concerns crowdfunding: http://www.gpo.gov/fdsys/pkg/BILLS-112hr2930rh/pdf/BILLS-112...

HistoryInAction3• 15 years ago

As long as individual investments made are less than $10k: `(B) individual investments in the securities are limited to an aggregate annual amount equal to the lesser of-- `(i) $10,000; and `(ii) 10 percent of the investor's annual income;

http://www.gpo.gov/fdsys/pkg/BILLS-112hr2930rh/pdf/BILLS-112...

phil2• 15 years ago

Thanks for this (and thanks to 100k, too!)

Pretty interesting -- if this goes through it seems like you could experiment with funding models somewhere between normal angel investing and the tiny bites that Kickstarter usually deals in.

tptacek• 15 years ago

Huh. That would be a big change. I'm surprised I haven't seen more advocacy for it from HN.

A question, though: in a post-"crowdfunding" world, what would a "crowdfunded" round do to your prospects of getting venture capital down the line? Wouldn't it gnarl up your cap table? How long will it take to shake the legal intricacies of this out?

dashr2• 15 years ago

H.R.2940 did pass the House today

http://thomas.loc.gov/cgi-bin/bdquery/z?d112:HR02940:

http://www.opencongress.org/bill/112-h2940/

H.R.2930 (CrowdSourcing one) still making its way

http://thomas.loc.gov/cgi-bin/bdquery/z?d112:HR02930:

http://www.opencongress.org/bill/112-h2930/

dashr2• 15 years ago

This one is more interesting: Can this be called the Facebook bill? It moves the 500 shareholder limit to 1000.

http://www.opencongress.org/bill/112-h2167

ph0rque2• 15 years ago

So... when can we mere mortals join Yuri Milner et al. in investing in YC companies?