{"id":104,"date":"2016-04-19T13:26:02","date_gmt":"2016-04-19T13:26:02","guid":{"rendered":"https:\/\/www.apslaw.com\/its-your-business\/?p=104"},"modified":"2023-04-25T14:53:14","modified_gmt":"2023-04-25T18:53:14","slug":"federal-crowdfunding-what-comes-next","status":"publish","type":"post","link":"https:\/\/www.apslaw.com\/its-your-business\/2016\/04\/19\/federal-crowdfunding-what-comes-next\/","title":{"rendered":"Federal Crowdfunding: What Comes Next?"},"content":{"rendered":"

In our original article on this subject, \u201cSEC Finally Adopts Federal Crowdfunding Rules: All That Glitters May Not Be Gold<\/a>,\u201d we discussed some of the highlights of the final federal crowdfunding rule (the \u201cRegulation\u201d) adopted by the Securities Exchange Commission (\u201cSEC\u201d) on October 30, 2015. It is anticipated that the Regulation will become effective in May 2016. A close analysis of the Regulation and the accompanying SEC Release makes it abundantly clear that federal crowdfunding pursuant to the Regulation (\u201cRegulation Crowdfunding\u201d) will present a daunting challenge.\u00a0 Any interested startup or early-stage company may have a difficult time affording the high costs associated with Regulation Crowdfunding.\u00a0 This is ironic, to say the least, because startup and early-stage companies are the very businesses Congress sought to benefit through these \u201crelaxed\u201d rules governing the offering of securities.\u00a0 Moreover, there seems to be a healthy skepticism as to whether there will even be a market for federal crowdfunding offerings.\u00a0 Further compounding this challenge is that businesses conducting such offerings enter the world of federal securities law and expose themselves to the legal and regulatory risks associated with this status.\u00a0 Not surprisingly, some have gone so far as to suggest that Regulation Crowdfunding is, essentially, a \u201cdead letter.\u201d<\/p>\n

Federal crowdfunding is not for every small business, given the costs and risks associated with a successful offering.\u00a0 Businesses will need to be practical in their approach to Regulation Crowdfunding and should conduct an early assessment as to whether the offering is feasible before incurring significant time and expenses.\u00a0 In our second article, Federal Crowdfunding:\u00a0 Practical Considerations For Interested Parties<\/a>, we offer some practical suggestions on how businesses can assess whether they are properly suited for Regulation Crowdfunding.\u00a0 In short, we recommend a practical, common sense structure that businesses, their counsel and other professionals involved in the offerings can use to guide them through the offering process, or at a minimum, through an assessment of whether an offering is feasible from a cost-benefit perspective.<\/p>\n

The Regulation is somewhat dense and subject to the development of certain important details in the disclosure area and the offering itself, including how the intermediary process will work.\u00a0 However, between the Regulation and the SEC Release which accompanied it, there is enough information for businesses interested in pursuing Regulation Crowdfunding to begin considering whether it is a viable option.<\/p>\n","protected":false},"excerpt":{"rendered":"

In our original article on this subject, \u201cSEC Finally Adopts Federal Crowdfunding Rules: All That Glitters May Not Be Gold,\u201d we discussed some of the highlights of the final federal crowdfunding rule (the \u201cRegulation\u201d) adopted by the Securities Exchange Commission (\u201cSEC\u201d) on…<\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[2,23],"tags":[50,49,25],"class_list":["post-104","post","type-post","status-publish","format-standard","hentry","category-business-law","category-securities","tag-crowdfunding-regulation","tag-federal-crowdfunding","tag-sec"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.apslaw.com\/its-your-business\/wp-json\/wp\/v2\/posts\/104","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.apslaw.com\/its-your-business\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.apslaw.com\/its-your-business\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.apslaw.com\/its-your-business\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/www.apslaw.com\/its-your-business\/wp-json\/wp\/v2\/comments?post=104"}],"version-history":[{"count":0,"href":"https:\/\/www.apslaw.com\/its-your-business\/wp-json\/wp\/v2\/posts\/104\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.apslaw.com\/its-your-business\/wp-json\/wp\/v2\/media?parent=104"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.apslaw.com\/its-your-business\/wp-json\/wp\/v2\/categories?post=104"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.apslaw.com\/its-your-business\/wp-json\/wp\/v2\/tags?post=104"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}