The SEC is working on the final rollout of the JOBS Act, which will allow everyone to invest in startups (current law only allows the wealthy to invest). After two years of delay, it’s finally expected to happen this summer.
As part of this process, the SEC recently requested feedback on 585 pages of draft rules. After re-reading all 585 pages nearly a dozen times (not fun!), we just submitted our official response to the SEC.
The SEC’s mandate is to protect investors while encouraging investment capital to flow to businesses. It’s a tricky balance to achieve, and the SEC has undertaken a good faith effort at getting the rules right.
However, we feel the SEC needs to better understand how high-quality startups currently raise funding, or the worst case scenario will happen: only those that can’t raise funding from professional investors will crowdfund.
Our letters to the SEC are focused on showing the importance of the ‘carried interest’ fund model developed by the “accredited crowdfunding” platforms like AngelList, FundersClub, and Wefunder. It’s the only way to attract high-quality startups, while perfectly aligning the incentives between platforms and investors (we only want to earn a profit if you do!).
We’re hopeful our continued outreach to the SEC will have an impact. We’ll keep everyone up to date as we learn more!
Wefunder supports three different federal laws that allow startups to raise money legally. To comply with the law, Wefunder Advisors LLC and Wefunder Portal LLC (both owned by Wefunder Inc) also list startups depending on the regulation used.
Legal May 16th 2016
Wefunder Portal LLC
for 395 startups
Wefunder Advisors LLC
for 115 startups
for 3 startups
Curious how well the companies have done? Or how many raised follow-on financing?
Some fine print: 1) These numbers include startups currently live on Wefunder if they pass their minimum target. 2) Some startups use two different laws at the same time (i.e., Regulation D and Regulation Crowdfunding).
Join 696,946 investors who funded 482 startups with over $177 million1
wefunder.com/updates/90554-our-comments-to-the-sec is managed by
Wefunder Portal LLC.
Wefunder Inc. runs wefunder.com and is the parent company of Wefunder Advisors LLC and Wefunder Portal LLC. Wefunder Advisors is an exempt reporting adviser that advises SPVs used in Reg D offerings. Wefunder Portal is a funding portal (CRD #283503) that operates sections of wefunder.com where some Regulation Crowdfunding offerings are made.
Wefunder, Inc. operates sections of wefunder.com where some Regulation D and A offerings are made. Wefunder, Inc. is not regulated as either a broker-dealer or funding portal and is not a member of FINRA.
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