The JOBS Act reached its tenth anniversary in 2022. We celebrated the date with the launch of our Podcast, KoreTalkX, recently mentioned by Spotify as in the top 10% of the most shared shows globally. But the regulations that brought a lot of novelties to the capital raising process still face some misconceptions, especially regarding Crowdfunding. We are introducing Online Capital Formation and why you have to understand it.
We do write a lot about the democratization of capital because we believe that everyone should be able to participate and share in the benefits, whether as entrepreneurs, brand advocates, innovators, or investors (both accredited and non-accredited). What we may be missing here is that Regulation CF (RegCF) has matured over the past decade, and it is time to look at it in a more complex way.
For many individuals, the word “crowdfunding” still evokes Kickstarter as a Top of Mind idea. Entrepreneurs that need money to launch a product pitch their ideas online and people can contribute based on a variety of rewards listed on a website. But that is far from being a regulated entity.
RegCF helps companies turn investors into shareholders. Companies and product makers are not selling their stories anymore. They are selling their stock. And that is why we feel the word “crowdfunding” doesn’t encompass the whole idea behind it.
That is why we put together our KorePartners, like Sara Hanks (CEO/Founder of CrowdCheck) and Douglas Ruark (President of Regulation D Resources) to help us put a flag in the ground to what we believe is the new era in Crowdfunding: Online Capital Formation.
Sara Hanks, Douglas Ruark, and Oscar Jofre Jr., our CEO and co-founder, will join our communications coordinator Rafael Gonçalves in a webinar next Monday, December, 19th, at 4 PM EST, to remind us all of the paths we have traveled while pointing the way forward for the Online Capital Formation idea.
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This article makes a good point about the awareness around the term "crowdfunding" and the fact that many prospective issuers or investors associate that term with rewards or donation-based campaigns. I've seen marketing material for rewards-based campaigns that tell people they are "investing" in a new concept or company when it's a general sense of the term and there is no return or ownership mechanism.
At CfPA, we're using the term "regulated investment crowdfunding" (#RIC) to help create the distinction. Perhaps we can all put language around the other forms that would help educate the public? e.g.
In Regulated Investment Crowdfunding, a person INVESTS.
In Donations Crowdfunding, a person DONATES.
In Rewards Crowdfunding, a person SUPPORTS.
Nice to see @Sara Hanks participating in this event.