fbpx

Crowdfunding background

Newest crowdfunding background information on raising capital online.

What is securities-based crowdfunding?

Crowdfunding as a method to raise capital is nothing new. For example, the Statue of Liberty was, in part, funded by the crowd. But the history of crowdfunding goes back much further than that. What is (relatively-speaking) new is technology and its ability to connect and enhance the otherwise disparate power of crowds and communities …

What is securities-based crowdfunding? Read More Β»

What is rewards-based crowdfunding?

Rewards-based crowdfunding is perhaps the most recognizable type of crowdfunding. This is due in large part to the success of early movers in the space, like Kickstarter and Indiegogo. Like most crowdfunding campaigns, rewards-based campaigns typically involve small dollar contributions from individuals to projects in return for some kind of reward. Unlike securities-based campaigns, contributors …

What is rewards-based crowdfunding? Read More Β»

What is donation-based crowdfunding?

A donation-based crowdfunding campaign is one in which there is no expected tangible or financial return to the donor or capital contributor.  Many people routinely donate to charities and nonprofits online or other online fundraising campaigns that assist victims of natural disasters or persons who need financial assistance for medical bills. The primary difference between …

What is donation-based crowdfunding? Read More Β»

What is a security?

A “security” generally refers to a financial instrument or an interest in a financial asset issued by another – typically a company. This can take the form of an equity (e.g., a residual or profit sharing) interest in a company or an interest in the debt of a company. Securities can take other forms too, …

What is a security? Read More Β»

So.Capital

What is material information? And why does it matter?

The popstar Madonna is not the only one who appreciates the material world. The concept of “materiality” is used throughout the federal securities laws. The U.S. Securities and Exchange Commission (the “SEC”) has defined materiality since at least 1937, which is a long time considering that the SEC was founded in 1934. The SEC used …

What is material information? And why does it matter? Read More Β»

Things to consider when investing in exempt securities

If you are considering investing in a private placement, or perhaps other exempt securities offerings, you ought to educate yourself on the private capital markets generally, including potentially seeking advice from a professional financial advisor. We do not provide financial advice but can identify a few objective facts to consider in advance of potentially making …

Things to consider when investing in exempt securities Read More Β»

What does it mean to diversify your investments?

Diversification is the practice of spreading capital among different investments to reduce the potential risk of losing that capital in any given investment. Basically, it’s generally not a good idea to put all your eggs in one basket. There are many ways to diversify your investments. For example, you can allocate your investment capital across …

What does it mean to diversify your investments? Read More Β»

How do state and federal securities laws interact?

In the United States, the U.S. Securities and Exchange Commission regulates and enforces the federal securities laws. But, the regulatory buck does not stop there. Each state in the Union has its own securities regulator that enforces its respective securities laws (sometimes referred to as “blue sky” laws). With limited exceptions, companies must comply with …

How do state and federal securities laws interact? Read More Β»

What is an accredited investor? Why does it matter?

In the United States, certain securities offerings that are exempt from registration under the Securities Act of 1933 may only be offered and sold to so-called “accredited investors.” The definition is a key component of several exemptions such as Rules 506(b) and 506(c) of Regulation D, and plays an important role in other federal and …

What is an accredited investor? Why does it matter? Read More Β»

Do antifraud provisions apply to exempt offerings?

In the United States, antifraud provisions apply to all securities transactions, including exempt transactions. Companies are responsible for the statements they make when offering or selling securities and false or misleading statements are subject to liability under the antifraud provisions. This applies to oral and written statements. The federal government in the United States can …

Do antifraud provisions apply to exempt offerings? Read More Β»

Scroll to Top