CrowdCheck Blog
Delivering All Things Crowdfunding and Online Investing
June 18, 2013 by Sara Hanks
There’s been a lot of discussion about what due diligence is (and isn’t) in the crowdfunding context. As we get closer to going live on crowdfunding, we thought it might be a good idea to start a series of blog posts that explain what good “due diligence” really looks like, and the things that investors and intermediaries should be looking for when making a crowdfunding investment.
So what is due diligence and how much of it do you have to do? It depends on the circumstances. Don’t you hate it when lawyers say that? But it really does depend. Due diligence is the investigation that a “prudent person” would do in the management of his or her own affairs under...
This entry is filed under Blog
June 04, 2013 by Andrew Stephenson
The internet has gone through radical changes since the year 2000. Google became a verb, Facebook became a thing, cat memes come and go every 5 minutes, and everyone has their own blog (just like this one!). What has not changed since the year 2000 is the Securities and Exchange Commission's opinion on what constitutes a public offer of securities over the internet (which is the same opinion the SEC held before there was even an internet to make offers on).
Way back in the year 2000, the SEC addressed the use of the internet through an interpretation of the rules currently in place as they apply to electronic media. At that time, 7 million people had...
This entry is filed under Blog
May 28, 2013 by Andrew Stephenson
As a devoted fan of Sid Meier's Civilization series working in the crowdfunding area, I couldn't help but stumble across an interview with Sid Meier in which he is expresses his uneasiness about using a crowdfunding platform to fund a game. According to Meier, he would "be a little concerned with [crowdfunding] if [he] committed to X, Y and Z and [he] found out down the road that Z didn't work well."
In business speak, Meier's concern is over the pivot—after moving forward with one concept, pivoting to another that is more feasible and potentially profitable. Meier's concerns about the pivot are laudable. He feels an obligation to his funders who were...
This entry is filed under Blog
May 16, 2013 by Brian Knight
This week has been a good week for the SEC, mostly in the sense that they aren’t the IRS (please don’t audit me). But it hasn’t been a good week for the millions of entrepreneurs and investors still waiting for the SEC to finalize the rules for the securities-based crowdfunding established by last year’s JOBS act. Every day that goes by without rules means more businesses without needed funding, more investors without meaningful investment opportunities, and greater uncertainty about whether crowdfunding as controlled by the SEC’s regulations will be viable. This uncertainty, more than anything else, is killer for small businesses.
Skeptics have accused the...
This entry is filed under Crowdfunding, In The News, SEC, Section 4(a)(6), Securities Law, Blog
May 14, 2013 by Brian Knight
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Last month we were fortunate enough to get a bunch of really smart people together to talk about how investment crowdfunding should be regulated...without it being overregulated. Many of you were there, but if you couldn't make it, or just want to relive the memories we have a treat: the conference videos. Enjoy!
This entry is filed under Securities Law, Video
May 06, 2013 by Sara Hanks
Everyone in the startup world knows a good pivot story, right? The wedding planner site that became a peer-to-peer boat rental outfit, the “gay Groupon” that became a fabulously successful retailer. It’s not that unusual for a team to find that their original concept just isn’t going to work, but they have this other idea that is going to disrupt some totally different industry. If they are operating on their own money, no one cares. If they’ve already raised funds then they may have to have some uncomfortable conversations with their angel or VC investors. But the likelihood is that those investors have been watching the business closely, may have a board...
This entry is filed under Crowdfunding, Disclosure, Fraud, SEC, Securities Law, Blog
April 23, 2013 by Andrew Stephenson
The New Year has come and gone and we are done with the first quarter of 2013, and yet we are still without SEC rules to implement crowdfunding as authorized by the JOBS Act. While some commenters on the SEC JOBS Act comment section have resorted to unproductive heckling of the SEC to get a move on, the rest of us understand what is at stake for crowdfunding and the need to get the rules right.
On April 8, 2013, CrowdCheck hosted our Second Annual Crowdfunding Conference. The conference title was "Fraud and Red Tape: Risks to the Potential of Securities Crowdfunding". We spent some time working on the title in order to highlight that there are two competing...
This entry is filed under Crowdfunding, Fraud, SEC, Securities Law, Blog
April 04, 2013 by Sara Hanks
JOBS Act Creates Crowdfunding Industry but No IPOs
This entry is filed under In The News, Blog
April 04, 2013 by Sara Hanks
Crowdfunding’s on Hold. So is Crowdfunding Fraud.
This entry is filed under In The News, Blog
March 26, 2013 by Brian Knight
The CrowdFundCast went to South by Southwest interactive festival to spread the joy…err…calm feeling of properly done due diligence. It was a great but time devouring experience, which we talk about here.
This entry is filed under Podcast