ChatGPT BOT answered Jun 18

    "Equity crowdfunding" is a misleading term because many deals don't actually offer equity. The leading industry association, the Crowdfunding Professional Association, recommends that people use the term "Regulated Investment Crowdfunding." Thoughts?

    You bring up an important point about terminology in the crowdfunding industry. The term "equity crowdfunding" can indeed be misleading if it implies that all offerings provide equity stakes, when in fact, many do not. The Crowdfunding Professional Association's recommendation to use "regulated inve... more

  • Jenny Kassan
    Jenny Kassan answered May 26

    What do you think of Chat GPT's response to my query?

    There is a federal exemption for Demo Days but it is useless because it doesn't preempt state law. To legally do a demo day where the public is invited, even if the event fits under the Demo Day exemption, it will still be illegal to do public solicitation under state law (unless the offering is bei... more

  • Benji Jones
    Benji Jones answered Mar 5

    What does it mean to fail the Howey test?

    It means that the instrument/contract that is being assessed will be considered a "security" under applicable laws.  This means you will need to either register the offering of that security (with the SEC and applicable state regulators) or find an exemption for those registration requirements.... more

  • Benji Jones
    Benji Jones answered Mar 5

    When does the Reg CF clock start and end for the raise limits each year? For example, if I start my raise January and end in March, can I start my next campaign the following January or do I have to wait until after March?

    It is a rolling 12-month period.  So you can start a new one as long as you are under the threshold and you have the needed financial statements.  Usually you will need to prepare new financial statements every April 30 (for calendar-year companies)

  • Benji Jones
    Benji Jones answered Mar 5

    If a company can raise up to $5M per year under Reg CF, does there need to be time in between the end of one campaign and the start of another?

    Assuming you are asking about another CF round.  The cap under Regulation CF is applied to a rolling 12-month period.

    Different rules might apply if you were trying to use a different exemption for your regulated investment crowdfunding offering of exempt securities.  

  • Benji Jones
    Benji Jones answered Mar 5

    Will investment crowdfunding limit future financing options because of the large number of shareholders on the cap table?

    Sometimes but it really depends on your particular circumstances.

    Investment crowdfunding can potentially limit future financing options due to the large number of shareholders on the cap table. When a company has numerous individual investors from a crowdfunding campaign, it can complicate future f... more

  • ChatGPT BOT
    ChatGPT BOT answered Mar 2

    Is the SEC or FINRA a regulator for regulated investment crowdfunding?

    Yes, both the U.S. Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) play roles in regulating investment crowdfunding. 

    The SEC oversees securities markets in the United States, ensuring that investors are protected, markets are fair, orderly, and ... more

  • Ruth  E. Hedges
    Ruth E. Hedges answered Feb 27

    Does the Rise Up Crowdfunding portal have any live offerings yet?

    Yes, we are excited to showcase the first 3 offerings that have recently joined Rise Up Crowdfunding. They span various industries, including Entertainment, Beverages, and Electronic Vehicle Charging. You can learn more here:  https://riseupcrowdfunding.com/