• “Accredited Crowdfunding” Platforms Granted No-Action Relief by the SEC
  • April 22, 2013 | Authors: Michael T. Campoli; Stephen M. Goodman
  • Law Firm: Pryor Cashman LLP - New York Office
  • When Congress enacted the Jumpstart Our Business Startups Act (the “JOBS Act”) last spring, many entrepreneurs were excited that they would soon be able to raise capital through the use of “crowdfunding” - i.e., raising money by seeking small amounts of cash from large numbers of both accredited and non-accredited investors through the Internet. In a break from the traditional requirements for an unregistered, private offering, Title III of the JOBS Act required the U.S. Securities and Exchange Commission (the “SEC”) to adopt rules to implement a new “crowdfunding” registration exemption that would permit issuers to approach these investors using “general solicitations”, such as email blasts, Internet postings and other similarly broad marketing techniques.