Regulation crowdfunding SEC

It might cost you $39K to crowdfund $100K under the SEC's new rules

On October 23, 2013 the Securities and Exchange Commission (SEC) issued the proposed rules for Regulation Crowdfunding. The 585-pages included an explanation of the rules, the feedback it received, and a cost/benefit analysis.

A cost/benefit analysis is common in many regulations to give the public an estimate of the costs associated with implementing the proposed regulation. It answers the question, “Do the costs outweigh the benefits?” For Regulation Crowdfunding it sheds light on the question, “How much will it cost to raise money via crowdfund investing, and how do I keep it to a minimum?” Here’s a closer look at what that analysis tells us.

The Background

The legislation requires that the selling of crowdfund securities take place on registered websites. The websites hosting the transactions are known as funding portals or broker dealers. These entities must register with the Securities and Exchange Commission (SEC) and the Financial Intermediary Regulatory Authority (FINRA). The legislation mandates investors have access to a business plan, use of proceeds, a valuation of the company, and financials. Firm may need to retain a Certified Public Accounting firm to certify the company’s financials or audit the company’s books. Every step costs money, from completing the required documents to retaining professional services to assist in compliance.

The SEC looked at 3 variables:

a) the success fee (in terms of a percent (%) of proceeds) paid to websites for facilitating the transaction,

b) the compliance cost related to the preparation and filing of individual forms both during and after a campaign, and

c) the costs for a Certified Public Accountant (CPA) review or audit (an expense that scales over $100, 000). Certain costs like the success fee as a percent of the raise are variable, others scale like the CPA/Audit costs for raises over $100, 000 and others like the compliance costs are fixed. The SEC provided both low and high estimates for these costs based on assumptions and surveys it took.

Echo Bay Books Crowdfunding Secrets: Tips, Tricks and Secrets To Funding Your Dreams (Quick and Easy Guides)
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Crowdfunding money to rebuild destroyed Montana

by mondoBLIND

...family health clinic
Crowdfunding money to rebuild destroyed Montana family health clinic —
Since 1976, Susan Cahill of All Families Healthcare has been in family practice in Montana, offering compassionate family/reproductive health services -- including abortion. It is for this reason that her clinic was all but destroyed by violent thugs, who even trashed her irreplaceable personal mementos. An Indiegogo fundraiser has brought in about $32K so far...

iFunding Hosts Real Estate Professionals Mixer in VA/DC Area on May 18, 2014  — Virtual-Strategy Magazine
This is an opportunity for those in real estate investing to exchange information, learn about crowdfunding as a method of rapid fundraising for real estate projects, and enjoy complimentary drinks and hors d'oeuvres.

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Problemio.com Funding & Fundraising Ideas
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