CROWDFUNDx: How Equity-Based Platforms Are Changing the Landscape
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The verdict is in. With the SEC’s final ruling, startups along with venture capital funds, private equity funds and hedge funds will be able to solicit their stocks and investment products via, social media, TV and radio to a greater audience.
In our first conversation at CROWDFUNDx NYC, Chance Barnett of Crowdfunder engages Sherwood Neiss of Crowdfund Capital Advisors to shed light on the new legislation, explain what this means for startups and ultimately how to use our social communities and relationships to multiply opportunities and propel entrepreneurship and innovation.
As a staunch advocate of utilizing equity crowdfunding, Neiss highlights the need to decrease dependency of venture capitalist funding by localizing crowdfunding efforts. With 90% of capital going to public companies and 65% of jobs stemming from small businesses, Neiss explains that the key to solving this disparity is by driving the JOBS Act forward- properly and creatively.
“Follow the rules” he suggests, to fully take advantage. The new legislation includes SEC regulated websites, mandated background checks, and all-or-nothing funding.
Now that there is a solution to the issue of funding, Neiss and Barnett focus on answering the question everyone wants to know: Will this idea/startup succeed?
The answer to this is founded in our community and relationships.
“What really moves the needle is to localize the effort and investment,” Barnett explains. With a 49% decrease in early stage seed from venture capitalists and a 28% increase in angel investors, the importance of engaging friends, family, and our network is crucial.
“We must leverage our social capital,” Barnett states; the responsibility is on us to drive entrepreneurship and innovation.
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