
Dan Brecher
Counsel
212-286-0747 dbrecher@sh-law.comFirm Insights
Author: Dan Brecher
Date: June 19, 2015
Counsel
212-286-0747 dbrecher@sh-law.comEquity crowdfunding was supposed to be a centerpiece of the Jumpstart Our Businesses (JOBS) Act. The statute authorizes companies to raise up to $1 million in any 12-month period from everyday investors using Internet funding portals approved by the Securities and Exchange Commission (SEC). Under existing laws, only “accredited” investors who meet certain net worth and income requirements can purchase these securities.
Unfortunately, the SEC continues to miss its rule making deadlines for enacting crowdfunding rules. While SEC Chair Mary Jo White maintains that completing rulemakings under the JOBS Act is a top priority, the comment period for the agency’s proposed rules expired on February 3, 2014. To date, the SEC has failed to take further action.
To fill the void, states are taking matters into their own hands and enacting their own crowdfunding regulations. Under these state laws, issuers can sell securities via the Internet to investors who reside in the same state, subject to certain caps. For instance, New Jersey’s proposed crowdfunding bill would allow local entrepreneurs to seek up to $1 million in private investment in increments of up to $5,000 from unaccredited investors residing in New Jersey.
As highlighted in a recent New York Times article, locally based crowdfunding has the potential to help get start-ups off the ground. Under a new Wisconsin law, a brewery called MobCraft raised $67,000 in growth capital from 52 Wisconsin residents. Equally impressive — almost all were first-time business investors.
Given the scarcity of traditional funding, crowdfunding presents a unique opportunity for entrepreneurs and start-ups to solicit capital directly from the public. However, despite the rapid adoption of state crowdfunding laws, entrepreneurs and investors have yet to fully buy into the new opportunity. According to the New York Times, less than 100 companies filed applications under state crowdfunding laws to date. Going forward, it will be interesting to see if the finalization of the SEC rules will provide the “jumpstart” the equity crowdfunding industry needs.
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Secured transactions form the backbone of a wide range of business dealings, including business loans, mortgages, and inventory financing. Because the stakes are often high and relatively minor oversights can have drastic consequences, lenders and borrowers should thoroughly understand how to form an enforceable security agreement that protects their legal rights. What Is a Secured […]
Author: Dan Brecher
Cashing a check marked “paid in full” can be a risky endeavor, particularly if you don’t fully understanding the legal implications. If you are owed more than the amount of the check you accept and deposit, you may waive your right to collect the full disputed amount. That is why you should consider either rejecting […]
Author: Dan Brecher
The One Big Beautiful Bill Act of 2025 (OBBBA) significantly impacts federal taxes, credits, and deductions. A key change relating to Qualified Small Business Stock (QSBS) allows greater tax-free gains for investments in startups and other qualifying small businesses. Company founders and other investors should understand how the enhanced tax strategy works or risk missing […]
Author: Dan Brecher
Corporate consolidation involves two or more businesses merging to become a single larger entity. The result is often a stronger and more competitive company that can better navigate today’s competitive marketplace. What Is Corporate Consolidation? Corporate consolidation closely resembles a basic merger transaction. The primary difference is that a consolidation creates an entirely new business […]
Author: Dan Brecher
Business law plays a critical role in nearly every aspect of running a successful enterprise, from negotiating a commercial lease to drafting employee policies to fulfilling corporate disclosure obligations. Understanding what is business law and your legal obligations can help your business run smoothly and build productive relationships with clients, business partners, regulators, and others. […]
Author: Dan Brecher
Corporate transactions can have significant implications for a corporation and its stakeholders. For deals to be successful, companies must act strategically to maximize value and minimize risk. It is also important to fully understand the legal and financial ramifications of corporate transactions, both in the near and long term. Understanding Corporate Transactions The term “corporate […]
Author: Dan Brecher
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!