12/26/2023 0 Comments Memoranda kickstarter![]() Read More ›ĭecemSeeking Equity Investment? Know the Rules While there’s always a risk that a project won’t make it from concept to completion, most backers have an expectation that their monetary pledge will be used in good faith and for its intended purpose. I have previously written about the tax implications of Kickstarter campaigns here. Funding on Kickstarter is all-or-nothing - a project must meet its funding goal to receive any money at all. If people like a project, they can pledge money to make it happen. Kickstarter is an online platform that allows project creators to seek financial backing. These are a few of the inventions and initiatives that have received the most funding on Kickstarter, the popular crowdfunding site. A card game called “Exploding Kittens” for “people who are into kittens and explosions and laser beams and sometimes goats.” A motion picture starring Kristen Bell. JFraudulent Kickstarter Campaign Leads to First-of-its-Kind FTC Legal ActionĪ drink cooler that doubles as a blender and stereo system. Read More ›Ĭategories: Crowdfunding, Venture Capital/Funding However, Title III crowdfunding campaigns involve such small amounts (i.e., $1 million or less) that broker-dealers will likely find it unprofitable to serve the market. Broker-dealers usually pass along their regulatory compliance costs to customers. The reason is that broker-dealers are subject to extensive rules and regulations. Broker-dealers are likely to be hesitant to serve as an intermediary in a Title III crowdfunding campaign. One of the key investor protections of Title III is that crowdfunding transactions must take place through an SEC-registered intermediary – either a funding portal or a registered broker-dealer. In short, businesses are now permitted (subject to certain rules and restrictions) to use equity crowdfunding to offer and sell securities to non-accredited investors. In a previous blog post, we discussed the key highlights of the new Title III crowdfunding rules. DecemTitle III Crowdfunding: What is a Funding Portal?
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