Our Crowdfunding Network Is Growing Part 7

Today was quite the busy day speaking with folks about PR and securities law. I am amazed at how little I know about securities law after years of studying things. It is quite the complicated subject.

I was supposed to speak with Katlin at Fundrise today, but I guess wires got crossed about the meeting time. I am still working through many questions with iFunding too and recent discussions with securities attorneys validated that we're responsible for investors we take in regardless of whether or not the portals have insufficient screening procedures for 506c or 506b. That and many other questions need to be explored.

We're speaking with some folks over the next few weeks about possibly buying a white-labeled set of products to set up our own portal. As I learn more about all of the diligence required to vet the portals this seems like it may be a viable option, but my strong preference is still to utilize infrastructure someone else has already thought through and set up. Time will tell what the best option is.

After exploring things more the proposed Regulation A+ doesn't really make sense unless the SEC allows folks to avoid merit review in each state for tier 1 offerings. It is unclear whether or not this will happen so operating under 506c for now seems to be the better option. That means that exploring services like what Crowdentials and Crowdbouncer offer seems like the best use of time at this point along with setting up a new website and brand. I saw that this is colloquially called "Accredited crowdfunding" in some circles. That seems like a bit of an oxymoron to me, but I guess it may make sense depending on the context.

From everything I am reading and conversations with insiders it appears that the SEC not meeting with Congress when the original legislation was passed is causing real-world implementation problems. The only substantive change that I have seen is the ability to advertise for investors, but then the "reasonable" rules are like a Sword Of Damocles hanging over your head if you choose to either get funding through a portal or design a process of your own. Until there is some case law about this it will probably be a source of confusion. There is also the trouble with reasonably verifying investors on the basis of net worth, which nobody seems to have a good answer for at this point.

I'll post more when I know more. Hopefully we'll get some movement with iFunding and Fundrise in the coming week or so.