This is a letter from the three guys at Startup Exemption, by the names of Sherwood Neiss, Jason Best, and Zak Cassady-Dorion, re-printed here with their permission, providing a status update on the Crowdfunding bill that Obama signed last week.
Thanks to these guys primarily, Steve Case (in the background) and many other individuals and groups, this legislation got through Congress in an amazing and relatively short period of time. You are also invited to participate in this process to insure that the bill gets implemented as planned. Enjoy!
President Obama signed Crowdfunding into law as part of the JOBS Act on April 5th. We did it! It was an amazing experience to be at the White House and watch the President sign into law an idea we had to update the security laws. To make it legal for entrepreneurs to use the Internet and Social Media to access funds from their friends and family to launch businesses and create jobs to help get us out of the recession.
This is a story about putting a stake in the ground, sticking to policy and out of politics, showing up and being present, being tenacious and never giving up. It is a story about 3 entrepreneurs who were naive enough to think that just because they had a solution to the funding void facing startups and small businesses that they could actually change deeply entrenched 80 year-old security laws. And when changing a law takes between 5 and 10 years, to have done it in 15 months, we’ve been told, is quite an accomplishment!
The reality is, we had good timing, a good story (it helps when entrepreneurs and not lobbyists show up to tell it), great teamwork and a true bipartisan desire to make a difference. There were many people to thank along the way. We’ve put together this list of folks that played an early and important role. Without these people, we never would have made it to law. They are Democrats and Republicans, politicians and staffers, businessmen and women, small and big business, authors, security lawyers and experts, entertainers, advocates, students and reporters. But most importantly they are believers in what makes our country so great … Entrepreneurs.
While CrowdFund Investing might be signed into law, it won’t go into effect until 2013. That’s because the SEC has 270 days to make the rules around which the legislation will operate in daily life. We continue to play an active role in this process. A letter from a group of 13 top equity and debt crowdfunding platforms and industry experts was sent to the President the day of the bill signing. In it we reiterate our desire to develop a transparent marketplace for crowdfunding where investor confidence is our number one priority. The President acknowledged this group in his comments.
This group has quickly grown in size (100+) and at a meeting in New York City on April 18th formally organized around a Statement of Intent. The group has chosen leaders which we endorsed to run this next leg of the race. The group also formed a trade association (The Crowdfunding Global Professional Association, CFGPA) which will represent the voice of the industry, advocacy and education for both investors and entrepreneurs. Another group (The Crowdfund Intermediary Regulatory Association, CFIRA) will focus on working with the SEC and potentially providing industry oversight . These are organizations ‘of the industry, for the industry.’ If you have any interest in being part of these associations run by those who have been part of the process all along, please register here.
This past week the group reached out to both FINRA and the SEC on working together to build a trustworthy partnership. Since the legislation mandates that all Crowdfunding websites be registered, the goal is to work with FINRA to see if there’s a way to develop a “Broker-Dealer Light” path for CrowdFund Investing intermediaries or facilitate the formation of a Self-Regulating Organization (SRO) that will oversee the industry.
What’s next for us?
Lots of speaking engagements! Sherwood recently spoke about Crowdfunding at the MIT Global Conference in Istanbul, Turkey and keynoted the Rutgers Entrepreneur Day. Jason testified in front of a Congressional hearing this week about Crowdfunding and is off to speak about Crowdfunding at events in Germany, Sweden and Norway. We have upcoming engagements in Canada, Brazil and Hong Kong.
People both in the USA and around the world are looking to us as we embark on Web 3.0. We went from ‘investing for profit’ to ‘investing for social good’ and now we embark on ‘investing from the heart.’
If you or your organization has any interest in learning about CrowdFund Investing, how it will work, how to get involved, who can benefit from it, and what impact it will have globally, then feel free to reach out to us.
Again thank YOU for making this happen!
Sherwood, Jason & Zak
Sherwood Neiss, firstname.lastname@example.org