Archive for the 'Crowdfunding' Category

The Road to Crowdfunding Hell

June 19 2012 No Commented

It is remarkable to me the lack of rational analysis about equity crowdfunding.  Sure, crowdfunding “sounds like” an easy source of capital for startup entrepreneurs, leading to happy entrepreneurs, delighted investors and job creation galore.  Few pundits seem to have the depth of knowledge and foresight to look far enough down the equity crowdfunding road […]

Protecting IP in Crowdfunded Deals

January 25 2012 No Commented

Angels and venture capitalists will not sign non-disclosure (confidentiality) agreements just to listen to an entrepreneur’s funding presentation, or even to read the entrepreneur’s business plan.  Serial entrepreneurs understand this and write their plans without describing the “secret sauce.”  Investors will eventually want to validate the intellectual property (IP) prior to investing but not just […]

Limiting the Number of Shareholders in Private Companies

January 19 2012 No Commented

The U.S. Securities Exchange Act of 1934, section 12(g), generally limits a privately held company to fewer than 500 shareholders.   The assumption has been that companies with 500 investors are quasi-public anyway, and for disclosure and other reasons should be forced to go public when the shareholder number approaches this limit. Since the IPO market […]

Crowd Funding and Job Creation

December 13 2011 No Commented

There seem to be two motivations behind the current buoyant enthusiasm in Congress over crowd funding for entrepreneurs:  (1) the democratization of funding for startup companies (no longer requiring such investors be wealthy) and (2) the job creation that is expected to result from creating more startup ventures.  In my earlier post, Crowd Funding – […]

Crowd Funding – A Critique for Entrepreneurs and Investors

November 25 2011 12 Commented

Crowd funding enables entrepreneurs to raise money in relatively small amounts from large numbers of interested investors.  In the sum, substantial amounts of money (as much as a million dollars) can be raised for each startup company.  Recently, entrepreneurs in many countries have been soliciting investment through “crowd funding” websites designed specifically for fundraising purposes.  […]