Why the Jobs Act is great for Angel List(josephwalla.com)
josephwalla.com
Why the Jobs Act is great for Angel List
http://josephwalla.com/why-the-jobs-act-is-great-for-angel-list-its-not-what-you-think
6 comments
Note, you can chose to keep your fundraising private, which allows you do to verify accreditation the old way. However, it's now unclear if events like Demo Day, a post on Facebook or other pitch events would count as 'general solicitation'. You don't want to run afoul of the SEC.
Having murky guidelines is probably a good thing. The trend in fundraising really should be headed toward more public, less private. It's worthwhile to read up on the history of why we have this line between "private, accredited" investors and general fundraising and the Securities Act of 1933. After spending a good day - day and a half researching what the new law means for companies starting to think about looking for Angel and/or VC funding, I wrote up some findings: http://ink.hackeress.com/2013/09/what-title-ii-of-jobs-act-m...
Like most of the movements of the time (prohibition), the original intent of the law was noble, but ultimately was misguided.
Having murky guidelines is probably a good thing. The trend in fundraising really should be headed toward more public, less private. It's worthwhile to read up on the history of why we have this line between "private, accredited" investors and general fundraising and the Securities Act of 1933. After spending a good day - day and a half researching what the new law means for companies starting to think about looking for Angel and/or VC funding, I wrote up some findings: http://ink.hackeress.com/2013/09/what-title-ii-of-jobs-act-m...
Like most of the movements of the time (prohibition), the original intent of the law was noble, but ultimately was misguided.
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SecondMarket also offers an accreditation service:
https://www.secondmarket.com/education/avp
It's part of their General Solicitation Solution:
https://www.secondmarket.com/education/landing/general-solic...
https://www.secondmarket.com/education/avp
It's part of their General Solicitation Solution:
https://www.secondmarket.com/education/landing/general-solic...
I interned at SM two summers ago. Getting a reliable accreditation service was a huge hurdle that they crossed, and it's very valuable. They have a really interesting product and they were even involved in shaping the JOBS act in the first place.
The whole accreditation thing is an unnecessary barrier-to-entry. I can understand wanting to keep litigation risks of sore losers at bay (caveat investor), but I can't support red tape that gets in the way of potential investors, no matter their balance sheets.
Consider investments in most startups as defacto donations until there is substantial profit or the big exit check clears &| stock documents are finalized.
Consider investments in most startups as defacto donations until there is substantial profit or the big exit check clears &| stock documents are finalized.
Crowdentials offers an accreditation service without using any tax returns.
http://www.crowdentials.com
http://www.crowdentials.com
Having just done a round partially made up of Angels, I don't see this as having a major impact on fundraising which is still predominantly private. I'm skeptical that we are moving broadly towards public fundraising in Angel kinds of investments.
Text Summary: http://pandodaily.com/2012/11/16/pandomonthly-with-naval-rav...