Crowdfunding has been the buzzword in the start-up world for years. But for most entrepreneurs, crowdfunding was almost as mythological as the sasquatch. While it was possible to fund a business venture through donations by attracting numerous potential investors, there was no real medium to reach out to a wide audience. Then came Kickstarter, GoFundeMe, IndieGoGo and a slew of other crowdfunding websites. Kickstarter alone has raised close to $2 billion for over 250,00 creative business projects. However, new rules seek to protect small investors from unscrupulous operators and may dampen crowdfunding by limiting fundraising & advertising while adding new disclosure burdens.
In this CLE program, Crowdcheck CEO Sara Hanks explores the recent revisions to the crowdfunding laws and discusses the potential impacts on both companies and investors. Among the key issues addressed in this course: Title III of the JOBS Act, what’s changed under the revisions, investor limits, exemptions, safe harbors, 4(a)(6) intermediary requirements, prohibitions on funding portals, filing requirements & information, financial disclosures, publicity & advertising, bad actor checks, liability under 4(a)(6) and resale restrictions on securities. Sara also provides numerous practical points for attorneys when counseling their clients on the positives and negatives of crowdfunding.
Sara Hanks, co-founder and CEO of CrowdCheck, is an attorney with over 30 years of experience in the corporate and securities field. Sara brings a wealth of legal expertise in securities law and start-ups to the emerging marketplace for crowdfunding and online capital formation. Her position prior to founding CrowdCheck was General Counsel of the bipartisan Congressional Oversight Panel, the overseer of the Troubled Asset Relief Program (TARP), chaired by now-Senator Elizabeth Warren. CrowdCheck provides due diligence, disclosure and compliance services for online capital formation, helping investors get the information they need to avoid fraud and make informed investment decisions, and helping entrepreneurs and intermediaries avoid liability.