Late last month, the SEC kept its word from late 2014 when it said it would issue final rules for Regulation Crowdfunding under the JOBS Act by October 2015.
[Jump to page 2 to watch the live interview 11/19/15 at 3:00 Eastern.]
Todd Crosland, CEO and Founder of Seed Equity Ventures, a broker dealer already operating and doing crowdfunding type equity raises under the SEC's Regulation D 506(c) rules for general solicitations, says, " I believe the SEC passing Title III will be a watershed event for both startups and investors. Startups and the general investing public will be forever changed."
Crosland explains the import of the new rules, "The purpose is to allow non accredited investors the ability to invest in startups, which was once only reserved for the elite few."
The rules are final, but they aren't effective, yet. As Crosland notes, "Once the rules go live on May 16, 2016 and Seed Equity's platform is approved by the SEC and Finra, non-accredited investors will be able to invest through the Seed Equity platform."
EnergyFunders will operate as a "platform" rather than as a broker-dealer under the new Regulation Crowdfunding rules, giving ordinary investors an opportunity to invest in oil and gas investments for the first time.
EnergyFunders founder Philip Racusin says, "We hope to educate investors and provide them transparent access to an elite asset class which was previously inaccessible for many. We also hope to attract more small operators to use our platform, which will provide them project funding traditionally denied to them by banks."
Many in the small business and startup arenas have hoped that there would be many crowdfunding platforms like EnergyFunders. Draft rules issued by the SEC in 2013 were disappointing to many and some players left the space or pivoted to other opportunities. It may be too soon to tell whether the new rules will yet create the intended jobs.
One of the biggest stumbling blocks in the draft rules, an audit requirement for companies wishing to raise more than $500,000, was amended in the final regulations such that an audit is required only for a second raise under the rules. A formal review is still required for all raises of $100,000 or more.
On Thursday, November 19, 2015 at 3:00 Eastern, Racusin and Crossland will join me for a live discussion about the new rules. We will be joined by Jason Best, one of the authors of the JOBS Act, attorney Douglas Ellenoff, and public relations pro Joy Schoffler. Tune in here then to watch the interview live. Post questions in the comments below or tweet questions before the interview to @devindthorpe.
You can download an audio podcast here or subscribe via iTunes.
More about Leverage PR:
Leverage PR is an Austin-based full-service public relations firm that delivers strategic planning, media relations and communications strategies to companies within the financial, legal, real estate and technology industries.
Schoffler's bio:
Twitter: @joyschoffler
Joy Schoffler, principal of Leverage PR, is a nationally recognized author and speaker in the field of innovative financial services marketing and communication. Prior to launching Leverage PR, Joy served as director of acquisitions for the Inc. award-winning private equity firm. Joy has written for a number of publications including: Entrepreneur.com, Social Media Monthly and MarketingProfs, among other outlets. She is a contributing author for the Wiley-published Bloomberg Media book “Crowdfunding: The Ultimate Guide to Raising Capital on the Internet.” Her expertise in helping issuers and investment firms market themselves to the accredited investment community has additionally led to Joy being featured in a number of outlets including: CNBC, Forbes, Inc., Reuters, Yahoo! Small Business and dozens of other niche sites.
More about Energy Funders:
Twitter: @EnergyFunders
EnergyFunders is an online marketplace that connects qualified investors to nationwide, small cap oil and gas projects managed by proven operators. Developed by experienced securities attorneys and trusted specialists in the oil and gas industry, EnergyFunders is the first platform to offer global and national participation in the $263 billion “small oil” market through equity crowdfunding, allowing investors to buy directly into wells themselves for investment minimums as low as $5,000. Managing assets of more than one hundred wells, the company has raised millions for projects, bringing unprecedented access, transparency and efficiency to one of the most elite and lucrative asset classes.
Racusin's bio:
Twitter: @philipracusin
Philip Racusin is the CEO and co-founder of EnergyFunders, an online marketplace that connects qualified investors to nationwide, small cap oil and gas projects managed by proven operators. A seasoned litigation attorney, Philip currently serves as a senior associate of Pagel, Davis & Hill, P.C., where he has successfully represented clients, ranging from individuals to large companies, in a variety of legal disputes for nearly a decade. He also launched several startup ventures prior to EnergyFunders, including a legal technology company that totaled over 50,000% ROI in one year. Both a savvy entrepreneur and accomplished litigator, Philip fuses legal expertise with astute business knowhow to navigate the oil and gas industry’s regulatory waters and carefully pre-vet each project offered through the site.
More about Seed Equity Ventures:
Twitter: @getseedequity
Seed Equity Ventures is a registered broker dealer with the U.S. Securities and Exchange Commission and is a member of both FINRA and SIPC. Seed Equity Ventures provides investment banking services to startups and growth companies from around the world.
Todd Crosland, courtesy of Seed Equity Ventures
Crosland's bio:
Twitter: @toddcrosland
A seasoned entrepreneur, Mr. Crosland has demonstrated the ability to build successful teams and companies. Mr. Crosland was the Founder, Chairman and CEO of Interbank FX, LLC ("IBFX"), from 2001 until he sold the firm in 2011. IBFX was a Futures Commission Merchant and Retail Foreign Exchange Dealer registered with the U.S. Commodities Futures Trading Commission. IBFX was also authorized and regulated by the Australian Securities and Investments Commission. IBFX was a worldwide leader in retail Forex trading services. IBFX offered individual traders, fund managers and institutional customer’s proprietary technology and tools to trade Forex online. IBFX saw Global customers grow to over 40,000, in more than 140 countries. Annual trading volume reached $750 billion. IBFX had 120 employees and offices in Beijing, China; Seoul, South Korea; Sydney, Australia; Salt Lake City, Utah and London, England. Mr. Crosland holds a B.A. in Business (Business Finance) from the University of Utah. He also currently holds the following Securities Licenses: Series 7, 24, and 63 and previously held series 3 and 30 Licenses.
More about Ellenoff Grossman & Schole LLP:
Ellenoff Grossman & Schole LLP is a New York City-based law firm comprised of over 65 professionals, offering its clients legal services in a broad range of business related matters. Founded in 1992, the Firm specializes in many areas of commercial law: Corporate, Securities, Private Investment Funds, Broker-Dealer Regulation, Real Estate, Labor and Employment, Intellectual Property, Litigation, Arbitration, Tax and Estate Planning.
Ellenoff's bio:
Douglas Ellenoff serves as the co-founder of iDisclose, an adaptive web-based application that enables entrepreneurs to prepare customized institutional grade private placement documents for a fraction of the time and cost. A highly esteemed corporate and securities attorney for more than two decades, Doug also serves as founding partner of Ellenoff, Grossman & Schole, a finance law firm known as a leader in crowdfunding, where he has facilitated several billion dollars in transactions for dozens of broker-dealers, investor groups and small businesses. As one of the world’s most prominent figures in crowdfunding, Doug was a key player in the implementation of JOBS Act regulations. A sought after speaker and media source on innovative capital formation, Doug is passionate about placing high quality legal disclosure within any businesses’ reach.
More about Crowdfund Capital Advisors:
Crowdfund Capital Advisors (CCA) delivers strategic insights to government agencies, financial institutions, and professional investors seeking to both create and implement innovative strategies to utilize crowdfund investing (CFI) technologies to drive innovation, job creation and entrepreneurship. They also study and invest in the emerging ecosystem of crowdfunding and the new solutions being created that will impact the broader private capital markets. The social web has changed the way individuals businesses, and governments organize and communicate and transact business. We are passionate about creating innovation, entrepreneurship and jobs through the use of crowdfunding. CCA delivers strategic services and implementation programs that create, proprietary deal flow for professional investors, better access to capital for businesses, and policy and regulatory innovation for governments.
Best's bio:
As co-founder and principal of Crowdfund Capital Advisors (CCA), Jason Best co-authored the crowdfund investing framework used in the JOBS Act to legalize equity and debt based crowdfunding in the USA. He has provided congressional testimony on crowdfunding and was honored to attend the White House ceremony when President Obama signed the JOBS Act into law on April 5, 2012. Jason co-founded the crowdfunding industry trade group that works with the Securities and Exchange Commission and FINRA as they create the rules for crowdfund investing. Jason also works with angel groups, PE/VC firms as well as governments and NGOs, including The World Bank, to understand the crowdfunding ecosystem and create successful crowdfund investing strategies. He was instrumental in the successful effort to have CCA selected by the US State Department’s Global Entrepreneurship Program as a Key Partner.
