‘SEC Ruling on Crowdfunding Both Opportunity and Stumbling Block for Startups’, Expert Says
Tuesday, November 3, 2015
There has been a lot of talk about SEC’s approval of Title III of the JOBS Act, which allows, for the first time, also non-accredited investors to join equity crowdfunding campaigns.
Doubts were cast whether this ruling will undermine retail investor protection, putting small private investors at risk of losing their hard-earned savings, for the excitement of gambling on the latest startup. This are real concerns, of course.
But there’s also another side of the coin: as Crowdsourcing Week founder Epi Ludvik Nekaj explains, the limits set by SEC to protect investors could actually reduce the chances for startups to take advantage of this new funding model.
I first met Nekaj some months ago, at an event he organized in Venice, and I was impressed by the level of expertise shown by him and by the other speakers. And while crowdsourcing is a different concept, not necessarily related to money, funding often plays a huge role in it, as the examples made on stage during the conference showed. Crowdfunding indeed, could also be defined as “crowdsourced financing”.
So, when the the SEC decision was announced, it was natural for me to ask him to comment, and we had a small chat.