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DIY Economy: Crowdfunding Businesses

Pete Springer/OPB

Crowdfunding for businesses has caught on from coast to coast. Most crowdfunding projects rely solely upon donations, and offer donors a small gift in return. Now a new type of crowdfunding has begun to emerge, one where the incentive for investors is business equity. After the JOBS Act passed, the Securities Exchange Commission (SEC) was put in charge of writing the rules to regulate the new bill. The regulations could affect the laws involving crowdfunding. The SEC’s rules were expected to be finalized by the end of 2012, but are currently still being drafted. The stalled rulings have left business owners and investors alike anxiously awaiting the final results.

We’ll talk with a securities lawyer about the possible rules the SEC is considering, and how they could affect the future of crowdfunding and venture capitalism. We’ll also hear from two business owners, Jennifer Ferguson and Scott Schroeder, about their widely varying experiences with crowdfunding.

Have you used crowdfunding to start or support a project? What was your experience like?


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