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US Senate drafts a Crowdfunding bill, 'Democratizing Access to Capital Act'

thecaliforniabusinessattorney.com

2 points by jamesshamenski 14 years ago · 2 comments

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jamesshamenskiOP 14 years ago

The obvious differences over the House Bill are;

1. individual participation level has been decreased from $10k to $1k.

2. Companies must use a public crowdfunding site.

3. Must be incorporated and also pick a primary state to do business under.

  • anigbrowl 14 years ago

    Although I think there's room for discussion on the amounts, these seem like sensible counter-proposals that do a lot to overcome the objections of consumer advocates. I'd be OK with a law of this form and figure that one could build in support for intermediate levels of investor sophistication after a year or two. A $1000 cap is low enough to ensure nobody gets wiped out while still being viable for bootstrapping. Alternatively, I'd suggest $2500 - the same amount that individuals can donate to a political candidate.

    The other requirements are sensible and might help budding entrepreneurs put pressure on their state legislatures to simplify, streamline, and reduce the cost of the incorporation process.

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