Although these regulations may create more red tape for some startups, the market will adjust and entrepreneurs will figure out how to work within them.
Tampa, FL (PRWEB) October 20, 2013
Crowd funding expert Kendall Almerico, CEO of popular crowd-funding website http://www.ClickStartMe.com discussed the effect new JOBS Act regulations proposed by the SEC might have on equity crowdfunding investors.
“While the SEC is imposing new regulations that are aimed at protecting investors from fraud, some investors aren’t too excited about them,” said JOBS Act expert Kendall Almerico. “Although these regulations may create more red tape for some startups, the market will adjust and entrepreneurs will figure out how to work within them.”
The recent news story on http://www.readwrite.com explains the latest regulations released by the SEC regarding a key JOBS Act component Rule 506. Almerico explains that Rule 506 now allows startups to generally solicit sales of securities directly from accredited investors provided that they take reasonable measures to prove an investor’s status. Along with the requirement to prove investor status, companies must also file Form D 15 days prior to initiating its fundraising process, and formally submit all written materials provided to investors to the SEC prior to any distribution occurring.
“The worst part about these changes is the ambiguity the SEC uses when describing what “reasonable” measures companies are expected to take when soliciting investors,” explains the crowdfunding expert. “Investors will be hesitant to turn over sensitive documents like a W2 or bank statement, just for admission to a demo day, or to get an investment package.”
“These types of regulations only increase the need for seasoned experts in the field of equity-based crowd funding,” explained Almerico. “The JOBS act was a sweeping bill that will change the landscape of startup investing, and so hurdles will be inevitable. Teams like ours at http://www.ClickStartMe.com are already prepared to navigate investors and startups through these challenges once the rest of the JOBS Act kicks in, and equity crowdfunding becomes the law of the land for everyone.”
About Kendall Almerico:
Kendall Almerico is a nationally recognized crowdfunding expert who has appeared in USA Today, Huffington Post, the New York Daily News, Business Insider, and hundreds of newspaper, blog, radio and television interviews. Almerico is also CEO of http://www.ClickStartMe.com, a crowdfunding site that provides individuals and businesses with an easy-to-use website to raise funds through online crowd funding. Almerico is also the founder of http://www.CrowdItForward.com, a charity-based crowd funding site that performs “Random Acts of Crowdfunding” and raises money for people in need through a 501(c)(3) charitable foundation.
Almerico is available for interviews and speaking engagements and may be reached by e-mailing media(at)clickstartme(dot)com or by calling 813.410.4658.