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EarlyShares.com wants the U.S. Government to realize what crowd funding has done for UK.
Within the last month several global publishers have reported crowdfunding is close to a two billion dollar industry, in 2012 alone.
Within the last month several global publishers have reported crowdfunding is close to a two billion dollar industry, in 2012 alone. Resource Investing News, Oregon Live and Fresh Business Thinking (UK) are just some of the many news outlets projecting crowdfunding can potentially generate over five billion dollars in the upcoming year.
However, current securities law in the U.S. prevent crowdfunding platforms or companies from offering shares in any company. Many politicians have unfairly associated crowdfunding as a gateway to fraud”. As politicians continue to debate the issue, the UK keeps moving forward. The irony of all this unnecessary controversy is anyone in the U.S. can DONATE money through crowdfunding sites like Kickstarter, but the people are not allowed to receive a monetary reward back. The UK has allowed shareholding through crowdfunding platforms and their business is booming (without fraud)!
With the 99% movement bringing issues of alleged fraud on wall street, main street, and saturated throughout the U.S., it has become apparent the investor has a right to be extra cautious- especially when it comes to innovative concepts when applied to raising capital. The premise of crowdfunding through social media networking affords everyone involved a transparent medium. Entrepreneurs are required to promote and sell their company to hundreds ( or thousands) of small investors (each investing an average of one to three hundred dollars) and with hundreds to thousands of people socially connected there is no room for possible back room deals or “fraud”. Today’s social media culture offers American investors a chance to back a business. The premise that the American people are unsophisticated investors, and they can be easily defrauded by crowdfunding schemes, isn’t a reality for such a progressive country.
EarlyShares.com CEO Maurice Lopes feels the same way. “Look at Crowdcube in the UK. It is basically the same thing we have built for the U.S. Crowdcube has been live for about four months now, and they have already raised over $2.5M for six companies from hundreds, if not thousands, of small investors. The company even funded its own expansion of close to five hundred thousand dollars, using their own platform. Crowdcube is helping many UK start-up businesses get off the ground. Imagine how many new businesses, and new jobs, could be created if the U.S. followed suit.”
Currently there are three crowdfunding bills in the Senate. The first, and most instrumental, is H.R. 2930 which has been introduced by Congressman McHenry (NC). This bill passed the house with a landslide bipartisan victory of 407-17; the second bill S.1971 by Senator Scott Brown (MA) and the last bill introduced was S.1970 by Senator Jeff Merkley (OR). None of the bills cost taxpayers s money since the bills are not proposals for government stimulus, but rather updates and modifications to antiquated SEC securities law restrictions (ie: increasing the number of shareholders for private company from 500 to unlimited, companies seeking less than $2M in a 12 month period be exempt from costly SEC legal fillings, reduction of red-tape or exemption from securities registration)
These bills have a great deal of potential to better the economy in the U.S., and these bills should have significantly more attention within the mainstream media and business trade publications. However, the bills seemed to be stalled by the Senate Banking Committee’s Chairman, Senator Tim Johnson (SD). Mr. Johnson’s opening remarks “Our nation is facing an unemployment crisis. Nearly fourteen million Americans are unable to find a job, and over five million have been unemployed for six months or longer. Here in Congress, putting our fellow Americans back to work should be, and must be, our top priority." Seem to have the same spirit intended by crowdfunding websites, like EarlyShares.com. The question remains, why haven’t these bills passed yet?
“The benefits of crowd funding are endless.” Lopes continued. “This is the change the country needs. People don’t want useless government bailouts; almost all previous government stimulus packages never reaches the little guy starting a company. Let’s face it, the doors for opportunity are all closed for most entrepreneurs;