additional info Crowdfunding: What it Means for Investors
http://mashable.com/2012/04/06/crowdfunding-bill-investors-tips/
Topic: U.S. CrowdFunding Bill - page 3. (Read 7298 times)
guruvan is quite correct. I'd just been about to post that myself.
In this country, rights are considered to be intrinsic parts of us, given by our Maker. The idea of living without your rights is similar to that of living with an artificial wooden head.
The whole excuse for having a government is to keep those rights upheld. To the extent that it does not - or encroaches upon those rights itself - it's failing in its own purpose.
We delegate specific authorities to that government in the founding documents. Anything we did not delegate to it, or to the States, remains with us. No matter how big a heap of legislation they generate purporting to give themselves brand-new authorities, or create brand-new offices to control, monitor or dictate various aspects of our lives.
In order for me to give something to myself or someone else, I must first have it to give. The same goes for government. I suppose I could steal it from someone else, but that would be theft on my part. In government, this is called usurpation.
So waiting for a government to tell you what you can and can't do is pretty silly. They do have control over how corporations are run, but that's only because we told them to regulate interstate commerce. That's probably forfeit at this point, inasmuch as they're so far outside the Constitution in most other ways. I would say people would be completely within their rights to do an end-run around them and do whatever via Tor-based encrypted sites; the government has pretty clearly defaulted on its Constitutional duties by this point, and subsidizing it or adhering to it is more or less giving aid and comfort to the enemy.
In this country, rights are considered to be intrinsic parts of us, given by our Maker. The idea of living without your rights is similar to that of living with an artificial wooden head.
The whole excuse for having a government is to keep those rights upheld. To the extent that it does not - or encroaches upon those rights itself - it's failing in its own purpose.
We delegate specific authorities to that government in the founding documents. Anything we did not delegate to it, or to the States, remains with us. No matter how big a heap of legislation they generate purporting to give themselves brand-new authorities, or create brand-new offices to control, monitor or dictate various aspects of our lives.
In order for me to give something to myself or someone else, I must first have it to give. The same goes for government. I suppose I could steal it from someone else, but that would be theft on my part. In government, this is called usurpation.
So waiting for a government to tell you what you can and can't do is pretty silly. They do have control over how corporations are run, but that's only because we told them to regulate interstate commerce. That's probably forfeit at this point, inasmuch as they're so far outside the Constitution in most other ways. I would say people would be completely within their rights to do an end-run around them and do whatever via Tor-based encrypted sites; the government has pretty clearly defaulted on its Constitutional duties by this point, and subsidizing it or adhering to it is more or less giving aid and comfort to the enemy.
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When the dust settles, entrepreneurs and small business owners will have access to a revolutionary new method of raising capital, and ordinary Americans will be given the opportunity to invest in their friends, family, and favorite companies, and not just the behemoths offered by Wall Street.
[emphasis added]That probably should have said: Americans will
FTFYRights are not gained or lost at the whim of a government. They are only recognized or fail to be recognized by a government.
I don't know what the solutions are - but there must be some way to issue and hold a public security anonymously, and still protect both sides from fraud and other crimes. (lol, people are still saying that bitcoin isn't going to work!)
It's high time the people stopped relying on, and permitting the government to protect them from everything that might be harmful. It's ridiculous.
Let the games begin!
I'm slapping some money down this weekend after I finish a little research on a company I'm looking at.
I'm slapping some money down this weekend after I finish a little research on a company I'm looking at.
The Jumpstart Our Business Startups (JOBS) Act was today signed into law:
Summary here:
- http://www.crowdsourcing.org/editorial/obama-crowdfunding-bill-signing-/13174
So, crowdfunding is now legal. Awesome!!
On this news, I would like to announce my new startup. I am seeking investment from the public via crowdfunding!
Ooopsss ... upon reading the details I see that even with this law it would be illegal yet for me to solicit funding by myself:
So scratch that. And the SEC won't have their part (establishing the rules for the intermediary brokers) done until 2013.
Unlike a Kickstarter, you can't just raise money for an idea. There must be an actual legal entity, such as a corporation. That's like $800 / year alone, in California. I suppose setting up a corporate in Nevada or something similar is an alternative.
So much for free market valuation for what you've invested in, at least not for the first year.
That probably should have said: Americans will regain their right to invest in their friends, family and favorite companies.
Yup. And nothing in there says the investment and/or dividends have to be made using dollars. Hopefully the SEC doesn't screw it up.
Summary here:
- http://www.crowdsourcing.org/editorial/obama-crowdfunding-bill-signing-/13174
So, crowdfunding is now legal. Awesome!!
Ooopsss ... upon reading the details I see that even with this law it would be illegal yet for me to solicit funding by myself:
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it essentially forbids companies from crowdfunding their own offerings on their own websites – companies must go through an intermediary if they want to crowdfund, and those intermediaries must in turn be registered with the SEC.
So scratch that. And the SEC won't have their part (establishing the rules for the intermediary brokers) done until 2013.
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The JOBS Act also imposes substantial requirements on companies seeking to utilize the crowdfunding exemption. For starters, they have to file with the SEC, the intermediary, and all potential investors, a beefy disclosure document that will include, at a minimum:
(A) name, legal status, address, website, etc.
(B) names of directors, officers, and 20% stockholders
(C) “a description of the business of the issuer and the anticipated business plan of the issuer” – the devil is really in the details of this one, and it remains to be seen whether the SEC will require this “description” to be 4 pages or 40 in order to be sufficient
(D) prior year tax returns, plus financials – see below for details
(E) description of intended use of proceeds
(F) target offering amount, deadline, and regular progress updates through the life of the offering
(G) share price and methodology for determining the price
(H) a description of the ownership and capital structure of the issuer, including a lot of detail about the terms of the securities being sold, the terms of any other outstanding securities of the company, a summary of the differences between them, a host of disclosures about how the rights of shareholders can be limited, diluted or negatively impacted, “examples of methods for how such securities may be valued by the issuer in the future, including during subsequent corporate actions”, and a disclosure of various risks to investors
(A) name, legal status, address, website, etc.
(B) names of directors, officers, and 20% stockholders
(C) “a description of the business of the issuer and the anticipated business plan of the issuer” – the devil is really in the details of this one, and it remains to be seen whether the SEC will require this “description” to be 4 pages or 40 in order to be sufficient
(D) prior year tax returns, plus financials – see below for details
(E) description of intended use of proceeds
(F) target offering amount, deadline, and regular progress updates through the life of the offering
(G) share price and methodology for determining the price
(H) a description of the ownership and capital structure of the issuer, including a lot of detail about the terms of the securities being sold, the terms of any other outstanding securities of the company, a summary of the differences between them, a host of disclosures about how the rights of shareholders can be limited, diluted or negatively impacted, “examples of methods for how such securities may be valued by the issuer in the future, including during subsequent corporate actions”, and a disclosure of various risks to investors
Unlike a Kickstarter, you can't just raise money for an idea. There must be an actual legal entity, such as a corporation. That's like $800 / year alone, in California. I suppose setting up a corporate in Nevada or something similar is an alternative.
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(E) crowdfunded securities cannot be transferred or resold for the first year after purchase, unless transferrred to the issuer, an accredited investor, as part of a registered offering, or to family members in some circumstances (i.e. death, divorce)
So much for free market valuation for what you've invested in, at least not for the first year.
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When the dust settles, entrepreneurs and small business owners will have access to a revolutionary new method of raising capital, and ordinary Americans will be given the opportunity to invest in their friends, family, and favorite companies, and not just the behemoths offered by Wall Street.
[emphasis added]That probably should have said: Americans will regain their right to invest in their friends, family and favorite companies.
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Others can complain if they wish – we prefer to build.
Yup. And nothing in there says the investment and/or dividends have to be made using dollars. Hopefully the SEC doesn't screw it up.
I also have to laugh at the term "Angel investor". I have done a bit of that myself and have friends who do it for a living. None of us are angels. Since when are angels motivated by profit. 
Lightrider posted this in another thread. It is using bitcoin for crowdfunding. Open Startup becomes an Open Source project http://www.youtube.com/watch?v=xc8O1VevmcI
Heh, it stresses mining as the way to generate funds to invest.
I'm not sure I was comprehending correctly. Did that say investors ("angels") give up 80% of any profits from ventures that launch because those profits are then reinvested into future ventures ("validated ideas")? I had a hard time understanding the flow, as far as what an investor has control of.
When I'm choosing to invest in a startup, I'm hoping for a big hit. I understand the risks but I'm thinking I'm smarter than everyone else and will discover the 10 bagger that nobody else did. That supports my thinking that even if four-out-of-five investments fail, I still gain big thanks to the one that hits it big time. But if I'm having to give up 80% of the gains, yet eat the losses then my motivation to go this route goes away. I guess I am saying I don't trust that reinvesting of the profits in new "validated ideas" is always going to be the best use of my funds.
Janet Tavakoli ... apparently not a fan of the CROWDFUND Act:
- http://www.youtube.com/watch?&v=wTWKT3pZgT8#t=1157s
To be fair, I think Tavakoli's argument is with the provisions of the JOBS act regarding what it will now allow for "emerging growth companies" (those with up to $1 billion in annual revenue) and she isn't specifically criticizing the CROWDFUND act (for companies raising up to $2 million through crowdfunding).
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This isn't helping small people compete against investment banks. This is enabling people who want to commit fraud to basically have their way with the general publiic.
- http://www.youtube.com/watch?&v=wTWKT3pZgT8#t=1157s
To be fair, I think Tavakoli's argument is with the provisions of the JOBS act regarding what it will now allow for "emerging growth companies" (those with up to $1 billion in annual revenue) and she isn't specifically criticizing the CROWDFUND act (for companies raising up to $2 million through crowdfunding).
Lightrider posted this in another thread. It is using bitcoin for crowdfunding. Open Startup becomes an Open Source project http://www.youtube.com/watch?v=xc8O1VevmcI
Nice reply after asking how an investor of a crowdfunded business can sell shares purchased after the 1 year statutory lockup period for IPO'd shares expires:
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It is highly, highly, HIGHLY unlikely that any "investor" in a crowdfunding offering will ever be able to sell any of his or her shares, until such time (if any) that the company itself is acquired for cash and therefore has a liquidity event. It would be the height of inadvisability for anyone to regard crowdfunding as a viable means of economic appreciation, or to believe that they will have any liquidity whatsoever once they have put in their money.
- http://www.quora.com/Crowdfunding/How-does-an-investor-of-a-crowdfunded-venture-sell-the-shares hero member
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I've been watching this bill since mid 2010 and I have to say, I didn't think they'd pass it. I am speechless. Can't be more proud to be an American living somewhere other than America right now.
Thanks for the update on this. I kinda wrote off this legislation and assumed that moneyed interests would crush it. I set up an account at one of the funding portals so that I will be in position. I encourage other bitcoin peers to do the same, we could turn a lot of people on who are interested in money but have not heard of BTC.
It's also a great place to see ideas that are out there and think about who you would invest in directly. I'm at www.growvc.com , but there are others.
It's also a great place to see ideas that are out there and think about who you would invest in directly. I'm at www.growvc.com , but there are others.
hazek, I quoted your response because my point above speaks directly to it.
I'm sorry but what good does it do me if something isn't law but gets enforced anyway? Nothing. I'm not pissed at this particular law, I'm pissed at statism in general. I can't stand being treated as a slave.
My point is that the only reason people tolerate it - and therefore allow it to get enforced - is through a lack of knowledge. By filling that lack, people can sort out society without revolutions or hopeless elections. It's just a matter of putting back what was lacking - and in some cases, deliberately hidden.
I feel the same way you do. Perhaps even moreso. Years ago, I realized that they couldn't do it if nobody paid their paychecks - or at least refused to do so until they shaped up. I also realized that subsidizing what they do would make me a party to it as well. For over a decade I've been living off the grid - and unemployable - as part of the choice not to enable them to do what they've been doing. If everybody did that, the problem would have been solved by now. People complain that the elections don't work, the courts don't work, and so on... but there's always a choice.
Always.
Be well,
- Satori
hazek, I quoted your response because my point above speaks directly to it.
I'm sorry but what good does it do me if something isn't law but gets enforced anyway? Nothing. I'm not pissed at this particular law, I'm pissed at statism in general. I can't stand being treated as a slave.
S.2190 the CROWDFUND Act passed in the Senate this past week.
This is good information to know. Thank you!
Stuff like these regulations by the state make my head want to explode. I cannot express in words how pissed I got when I read the OP.
hazek, I quoted your response because my point above speaks directly to it.
Im sure they will let you invest unimited funds into the government ie "political donations"
It shouldn't be that long before someone creates a Kickstarter/BitCoin for taking down corrupt politicians and CEOs. Wouldn't take much; a crowdsourced Wiki [that requires people to cite their sources] that also creates a ChipIn-like BitCoin fund to pay the court costs and the attorneys' fees. Any court-awarded damages could go directly back to the users who invested in that fund, in whatever proportion they invested. People could actually profit from sorting out all the corruption among corporations and politicians. I mean, we are in a target-rich environment there.
I wonder what lame investments CAPS Council will allow the unwashed masses to invest in? Government has historically demonstrated very poor financial guidance. Actually, it can be perceived as criminal, except it cannot be criminal if it is done by government. I'll stick with real estate, art, and Bitcoin. I am anxious to see what becomes of GLBSE. It may be labeled illegal someday, but having an international perspective that Bitcoin provides, especially with Brain Wallets, will make investing in democratizing enterprises safe from the long arm of the banksters.
Im sure they will let you invest unimited funds into the government ie "political donations"
I wonder what lame investments CAPS Council will allow the unwashed masses to invest in? Government has historically demonstrated very poor financial guidance. Actually, it can be perceived as criminal, except it cannot be criminal if it is done by government. I'll stick with real estate, art, and Bitcoin. I am anxious to see what becomes of GLBSE. It may be labeled illegal someday, but having an international perspective that Bitcoin provides, especially with Brain Wallets, will make investing in democratizing enterprises safe from the long arm of the banksters.
Atlas, you are a brain fart. stfu
The ID requirement for GLBSE is optional, and is only for those that are offering something, not for buyers. To prevent the scammers that were seen in 1.0, 2.0 offers ID verification which will then mark the account verified. Those that choose not to send ID will still be allowed, but will not be marked trusted. This is my understanding of the changes that Nefario is implementing, and they are positive changes.
The ID requirement for GLBSE is optional, and is only for those that are offering something, not for buyers. To prevent the scammers that were seen in 1.0, 2.0 offers ID verification which will then mark the account verified. Those that choose not to send ID will still be allowed, but will not be marked trusted. This is my understanding of the changes that Nefario is implementing, and they are positive changes.
GLBSE is finished. We need blockchains for financial securities.
Right now the current concept is a brain fart.
Right now the current concept is a brain fart.
So glbse is asking for IDs, too.
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