Crowdfunding Options Grow

The Orange Business Journal quoted Jeff Estes, a shareholder in Stradling’s corporate practice, for an article on the SEC regulation for crowdfunding that recently took effect. The new regulation is part of the federal Jumpstart Our Business Startups (JOBS) Act, and is meant to stimulate the funding of small businesses by easing some securities regulations. “The maximum amount of cash that can be given to a single startup is $1 million. The SEC set to balance goals of providing protection for investors and making fundraising easier for early stage companies,” Estes said. However, Estes commented that some of the requirements may make it more expensive and complicated for early stage companies to take advantage of the regulation. “For example, we have had some clients give pause when they first learn about the disclosure and reporting requirements of the [regulation], including, in some cases, the need for financial statements that must be reviewed by an independent public accountant.”