CNBC published an article (An idea getting tougher to fund: Venture capital) in June that piqued our interest because of its perspective on the seemingly established startup financing method, venture capital, being overtaken by the “new kid,” crowdfunding.
eShares issues electronic shares for private companies and then acts as the registration agent for those companies. To use the service, a company sets up an account and designates certain people who can issue and sign certificates. eShares then manages the workflow of getting existing shares entered into the system.
Indeed, there is a lot about Wefunder that we like and the sentiment above is fairly typical of portals that will offer crowdfunding to non-accredited investors through Title III of the JOBS Act. It is precisely because the sentiment is common that we feel compelled to comment on it, though original our comment is not. We think New York Times columnist Andrew Sorkin was dead on back in April, 2012 when he wrote…
The handwringing by the SEC over the JOBS Act is not without justification. The real issue is about investors not understanding what they are getting into. The financial acumen regarding intricacies of an investment isn’t determined by an investor’s net worth. It is determined by experience and knowledge, neither of which are parameters under the JOBS Act. While part of the issue is about disclosure, the rest is about the investor understanding the issues and pitfalls.
CircleUp is an equity crowdfunding platform, presently open only to accredited investors, which primarily features existing U.S. consumer products companies. Ryan Caldbeck, CircleUp’s CEO spoke with AIMkts about raising capital, their focus retail and consumer goods and CircleUp’s presence as an investment platform.
In my role as an Investor Executive at CircleUp, an equity based crowdfunding site focused on the consumer and retail market, I spend most of my day talking with investors. One question I’m asked all the time is what Robe de Soirée is the difference between the various crowdfunding platforms? Here are some guidelines to help investors navigate the landscape.
Whereas crowdfunding can be thought of as a primary market, a pre-IPO market is a secondary market. Stated another way, crowdfunding involves the sale of restricted securities by the issuer of such securities whereas a pre-IPO market is one where a holder of restricted securities can sell them to a third party.