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September 14, 2011 / teamprofounder

ProFounder Goes to Washington

We started ProFounder because we believe in creating more access to capital for entrepreneurs and feel that crowdfunding is an ideal solution for this. It looks like the government agrees.

Obama stated in his speech on the American Jobs bill that one of his priorities with this legislation is to “help entrepreneurs and small businesses access capital and grow.” In keeping with this goal, he proposed a change to regulation around crowdfunding:

  • Reducing Regulatory Burdens on Small Business Capital Formation: As part of the President’s Startup America initiative, the Administration will pursue efforts to reduce the regulatory burdens on small business capital formation in ways that are consistent with investor protection. This includes working with the SEC to explore ways to address the costs that small and new firms face in complying with Sarbanes-Oxley disclosure and auditing requirements. The administration also supports establishing a “crowdfunding” exemption from SEC registration requirements for firms raising less than $1 million (with individual investments limited to $10,000 or 10% of investors’ annual income) and raising the cap on “mini-offerings” (Regulation A) from $5 million to $50 million. This will make it easier for entrepreneurs to raise capital and create jobs.

Change is in the air for the crowdfunding industry and we are thrilled to be given the opportunity to work with the government to help shape new solutions to improve capital access for entrepreneurs. We got a call from the House Committee on Oversight and Government Reform a few weeks ago letting us know that they would be holding a hearing on crowdfunding and soliciting our feedback on potential regulatory change. We’ve learned an incredible amount over the past two years about the legal, business, and social aspects of crowdfunding and are honored to be identified for our expertise.

A bill is currently being drafted to embody the change that Obama outlined in his address. When asked for our feedback on important provisions to this bill we outlined three key areas that we feel are critical to success and plan to outline specific suggestions in each of these categories during our testimony:

  1. Reducing the barriers for new businesses to form which facilitate crowdfunding
  2. Reducing the barriers for entrepreneurs to access all of the capital that is available in their communities
  3. Protecting investors and preventing fraud

From an entrepreneur’s perspective, the key changes being discussed to get excited about are

  • being able to advertise your offering widely (general solicitation)
  • allowing anyone to participate (including an unlimited number of unaccredited investors).

My (Dana’s) full testimony submitted for this hearing is posted online here.

We admire Committee Chairman McHenry, Ranking Member Quigley and the Members of the Committee for taking such fast action to draft a bill and are very excited to be a part of this on going dialogue. We also recognize that many people have been working very hard to get this issue the attention that it deserves, including the Start-up Exemption Team, and sincerely applaud their efforts as well. Lastly, and most importantly, a huge thank you to all of the entrepreneurs that we’ve had the privilege of working with over the past two years — you are our inspiration and why we motivated to be in DC right now pushing for change.

The hearing will be this Thursday 9/15/11 at 9:30amEST and will be streaming live here.

What an adventure! More updates coming soon.

Dana

6 Comments

Leave a Comment
  1. Tony G / Sep 15 2011 8:34 pm

    This is a great thing bro

  2. Freeman White / Sep 27 2011 2:22 pm

    Thank you Dana. I’m glad our industry’s voice was there to be heard!

  3. Sathya Sekaran (@sfsekaran) / Oct 3 2011 3:14 pm

    Awesome! Go Dana!

  4. Curtis Smith / Oct 6 2011 1:23 pm

    Thanks so much. Keep up the fight Dana. We need you.

Trackbacks

  1. ProFounder in Washington | go-upsmart.com
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