The SBA holds the solution to safeguarding the crowd-funding process.
San Ramon, CA (PRWEB) March 05, 2012
Initial Crowd Offering Group (ICO) Group, a coalition of local small business leaders and entrepreneurs who are committed to level the financial playing field, today announced a new grass-roots approach in support of the crowd-funding initiative currently before Congress. This approach would make it safe and practical for every day investors to buy and sell shares of local, small and start-up companies. It would also make it possible for these same companies to receive government sponsored training and assistance in doing so, utilizing the already available resources of the Service Corps of Retired Executives (SCORE) and the Small Business Administration (SBA). To kick-off this initiative, ICO Group will deliver a series of apolitical, unbiased briefings to SCORE and SBDC offices across the state.
Crowd-funding legislation will allow businesses to sell equity to a broad shareholder base via an Internet intermediary. The legislation was introduced into the House by Representative McHenry [R-NC] and into the Senate by Senators Brown [R-MA] and Merkley [R-OR].
Having already passed 407 to 17 through the House (bill HR 2930), according to Project Vote Smart, crowd-funding is earning bipartisan support. The Senate bills are awaiting approval. However, they were recently identified as a top priority by Senate Majority Leader, Harry Reid [D-NV].
Supporters argue crowd-funding provides entrepreneurs or small business owners the green light to engage the middle class and their local communities as investors -- a massive, yet previously prohibited, capital alternative to angel investors, venture capitalist and banks. They also point out that it provides individual investors and communities with the opportunity to “get in on the ground floor” and support local commerce. Detractors fear fraud because an illegitimate shell company with an attractive website could conceivably con many investors. They also fear the well-meaning but unready entrepreneur who could become quickly inoperable due to the added responsibility of juggling a hundred new shareholders.
To this end, ICO Group is working with SBA’s SCORE and SBDC offices across California to kick-off a series of meetings discussing crowd-funding’s promises and dangers and the role that their organizations could potentially play.
“The SBA holds the solution to safeguarding the crowd-funding process,” said Ian Schuster, President of Schubros Brewery and the head of ICO Group. “As an entrepreneur, I want crowd-funding to pass of course, but I’m just as worried about fraud as are the bills’ detractors. But we’ve resources already in place to address that issue -- take SCORE, for instance, with 364 offices and over 13,000 volunteers, who don’t receive a dime of tax-payer money. It can provide low-cost, face-to-face validation of a company’s legitimacy along with the voice of reason to save or dissuade the overambitious entrepreneur. By working with SCORE and the SBDC, we can craft a very affordable human solution to this problem”.
“Without the involvement of SCORE and the SBDC, the House and Senate will be challenged to find a centralized way to deliver the crowd-funding protections that investors need and the preparations that entrepreneurs require,” added Bryan Brumfield, CEO of Brumfield Cellars. “They will be forced to refer the issue back to the SEC in a regulatory process that will guarantee recession-wearied small businesses another year of capital-starvation.”
The presentations, which will be held from March through May, 2012 at SBA SCORE offices in cities throughout California including Chico on March 26; Santa Rosa on March 29; Los Angeles on April 2 and Ventura on April 9; will answer questions like:
•What is Crowd-Funding?
•What are its requirements for investors, Internet-intermediaries and small businesses?
•What are its limitations?
•What will it change?
•What are its pros and cons?
•How can SBA and SCORE play a significant role?
•What can small businesses do to address its complexities?
More About Crowd-Funding
Although the crowd-funding legislation was overwhelmingly approved by the House of Representatives (407 to 17) last November, it has experienced delays in achieving Senate approval. However, voting on this legislation is expected to be complete in early March, potentially making it possible for small businesses and entrepreneurs to raise funds online.
With companies like Kickstarter and Kiva, which have pioneered the concept of collecting small contributions from thousands of individuals, online fundraising is not new. However, up until now, equity sales were not possible. These fundraising efforts were only limited to charity and micro loans.
About ICO Group
Schubros Brewery and Brumfield Cellars, together with other small businesses, are spearheading the newly formed ICO Group, a grass-roots organization which aims to help small businesses identify alternative sources of capital. In addition to a collection of companies that are currently working to further its cause, ICO Group is made up of security lawyers, accountants and leading accounting software experts. Currently, the organization’s main focus is to help to facilitate crowd-funding best practices.
ICO Group’s lead, Ian Schuster, president of Schubros Brewery, is a business consultant and former brand manager for Marlboro with an MBA from the London Business School.
About Schubros Brewery
Schubros Brewery was founded in 2011 by four beer and food industry veterans who together possess nearly 50 years of industry experience. Striving to elevate beer enjoyment to the highest level, Schubros believes in creating the ultimate epicurean experience through its purposefully reciped beers.
Guided by three core values– community, responsibility and quality, Schubros is committed to preserving the purity of its brands, investing in green technology and using all-natural and organic ingredients. Schubros Brewery plans to participate in community events, hire locally and give one percent of its core-brand sales to worthy organizations in San Ramon and the Tri-Valley including area schools, parks and wildlife and environment preservation groups. Some of the causes to which the brewery is already lending its support include Blue and Gold Star Moms and the local SBA SCORE group’s effort to help veterans transition to entrepreneurial ventures. For more information about Schubros or ICO Group, please visit http://www.schubrosbrewery.com or call (925) 786-2232.