On the heels of our launch last week of SCcrowdfund.com, which will allow businesses and non-profits to post their business ideas and projects on a public online portal to encourage people to donate (donation crowdfunding) or invest (private placement investment for those with high incomes), more good news is expected tomorrow.
At 10 am, the U.S. Securities and Exchange Commission (SEC) will hold a public meeting at which time it is anticipated that it will release proposed rules that will govern the sale of securities in businesses via crowdfunding. In 2012 Congress passed the JOBS Act that had as one of its provision legalizing businesses to solicit and receive investments of as little as $100 from all citizens through online portals popularized by donation crowdfunding firms like Kickstarter and Indiegogo.
The South Carolina Small Business Chamber of Commerce (SCSBCC) and the American Sustainable Business Council’s (ASBC) support for security (or equity) crowdfunding dates back to 2010 when the concept was originally proposed in a petition to the SEC. The SEC has come under pressure to promulgate regulations that will govern how security crowdfunding is carried out. Just yesterday a group of U.S. Senators including those who were critical to the passage of the law, including Senators Jeff Merkley and Mary Landrieu, sent a letter to the SEC calling on the agency to complete its security crowdfunding regulations.
If the SEC does release its proposed regulations tomorrow it will begin a public comment period enabling those with an interest to critique the rules and possibly influence the final regulations. But more importantly it will give business organizations like the SCSBCC and ASBC a clearer timeline for incorporating security crowdfunding in our portal platforms. It will truly be a revolutionary opportunity for everyday citizens to invest small amounts of money into growing their local economies by providing capital to locally-owned businesses.
When the time comes, hopefully in 4 or 5 months, we will add security crowdfunding to our statewide portals (SCcrowdfund.com) for donation crowdfunding and private placement investment. This is exciting!