Selling Equity Through Crowdfunding: A Comment

18 Pages Posted: 28 Jan 2014

See all articles by J. Robert Brown

J. Robert Brown

University of Denver Sturm College of Law

Date Written: January 27, 2014

Abstract

The Securities and Exchange Commission has proposed rules that will implement the crowfunding exemption set forth in the JOBS Act. See SEC File No. S7-09-13. Once implemented, the exemption will allow non-reporting companies to use crowdfunding to raise equity. The SEC’s proposal, however, raises a number of issues, including: (A) concerns over reliance on the “collective wisdom of the crowd” as a substitute for traditional investor protections; (B) concerns over reliance on investor self-certification as a means of enforcing the investment limits for individual investors; (C) the inconsistency of the proposed method of calculating the offering limits applicable to issuers with the requirements of the JOBS Act; (D) concerns over the elimination of the integration doctrine; (E) the need to address and include persons in civil unions/civil partnerships within the definition of family member; and (F) the need to require the filing of Form Funding Portal in an interactive format. The attached paper analyzes all of these issues.

Suggested Citation

Brown, J. Robert, Selling Equity Through Crowdfunding: A Comment (January 27, 2014). U Denver Legal Studies Research Paper No. 14-11, Available at SSRN: https://ssrn.com/abstract=2386278 or http://dx.doi.org/10.2139/ssrn.2386278

J. Robert Brown (Contact Author)

University of Denver Sturm College of Law ( email )

2255 E. Evans Avenue
Denver, CO 80208
United States

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