Blog Editor and Contributor: Leigh Cole.  I am a shareholder and director of Dinse, Knapp & McAndrew, PC, a regional law firm in Burlington, VT.  My practice is at the intersection of business, education and the creative economy.  Most of my clients are businesses and educational institutions.  With a national immigration law practice, I advise clients on immigration for international professionals, students and scholars in the United States. Contact me, or visit the Dinse, Knapp & McAndrew, PC, Website >

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Entries in crowdfunding (1)


>The New Jumpstart Our Business Startups Act (JOBS Act)

Dave Gurman, Esq., Contributor

The Jumpstart Our Business Startups Act (JOBS Act) became effective as of April 5, 2012.  While the SEC regulations regarding lifting the advertising ban and crowdfunding won't be final until 2013, the law opens new doors for raising money by small business.

As counsel to many entrepreneurs and small businesses, I have personally experienced the difficulties and expense of complying with state and federal securities laws.  While many of those hurtles will still exist after the JOBS Act, the crowdfunding portion of the Jobs Act could make life easier for entrepreneurs who want to use modern technology to reach a larger audience of fans and investors. 

One site to keep an eye out for is CircleUp started by a Shelburne, Vermont native.  It looks like they are ahead of the curve on this and I am sure are anxiously awaiting the SEC’s regulations on crowdfunding. 

In the same vein, I'll also be watching Launcht Technologies who provide custom crowdfunding platforms for universities, foundations, businesses, and conferences.  They have some local Vermont talent and are definitely going to be a player when we hear from the SEC.  Middlebury College has already used their technology for its MiddStart program.


Here are the nuts and bolts of the Act that I see being relevant to Vermont businesses:

1) Lift ban on advertising - The Act allows startups (and any other company seeking investment) to run ads seeking investors for what are known as Rule 506, Regulation D offerings.  This has always been a big no no.  While all investors still need to be accredited, this is a sea change in how private companies may solicit investors.

2) Crowdfunding. Startups will be able to use authorized crowdfunding platforms to obtain investments from non-accredited investors. Here’s the deal:

   >Maximum raise is $1,000,000 in 12 month period;

   >Crowdfunding platform/site needs to be approved by SEC; and

   >There are caps on investments from non-accredited investors:

      (a) $2,000 or 5% of the investor’s annual income or net worth (whichever is greater) for investors with annual income or net worth less than $100,000

      (b) 10% of investor’s annual income or net worth with a cap of $100,000 if investor annual income or net worth is $100,000 or more

3) Easier/cheaper IPOs (the so-called IPO Onramp) makes the IPO process easier for emerging growth companies (companies with less than $1 billion in annual gross revenue) and reduces their reporting and disclosure obligations for up to five years post-IPO.

For a detail discussion of these provisions, see the summary done by Akin Gump’s here.  So now the wait is on to see what the SEC does with this.


David R. Gurtman, Esq., Contributor