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Real Estate: the Next Crowdfunding Boom?

By Liyan Chen

The JOBS Act has led to the boom of crowdfunding platforms across many industries, and it seems like it is also poised to change the face of the real estate financing. As Bloomberg pointed out recently, the implementation of the JOBS Act will open up opportunities for real estate crowdfunding start-ups by saving them time and money on the legal process.

Here’s some background: Before the passage of the JOBS Act, real estate financing was mainly available to accredited investors under Regulation D of the Securities Act of 1933. But the JOBS Act, which eases restrictions on investments, will allow more individuals, including non-accredited investors, to invest up to $2,000 a year or 5 percent of their income or net worth in commercial real estate projects.

Currently, these real estate crowdfunding platforms, like Washington, D.C.-based Fundrise for example, have to go through a lengthy approval process by the SEC and local regulators.

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Mary Jo White to Lead SEC: Crowdfunding Implications?

By Anton Root

President Barack Obama nominated Mary Jo White, a former federal prosecutor, to chair the Securities and Exchange Commission (SEC) earlier today.

White first rose to national prominence in 1993, when she became the U.S. attorney for the Southern District of New York, a position she held until 2002. While there, she oversaw the prosecution of high-profile individuals like mafia boss John Gotti, terrorist Sheik Omar Abdel Rahman, and even Osama Bin Laden. But she is best known for being a tough leader with a knack for punishing white collar crime. “You don’t want to mess with Mary Jo,” the president said when announcing his nomination.

“When it comes to prosecuting white collar criminals, she’s got an outstanding track record,” Douglas Ellenoff, of Ellenoff Grossman and Schole LLP, told Crowdsourcing.org. “She’s really an interesting and credible pick for the president, as it relates to the administration’s – and now the SEC’s – commitment to enforcing violations of securities laws.”

The Congress is expected to support the nomination, though some may question her knowledge of complicated financial laws. Her trips back and forth through the public-to-private-sector revolving door may also raise a few eyebrows: before and after her stint overseeing New York’s Southern District, White practiced law at Debevoise & Plimpton, defending some of the biggest names on Wall Street.

What does White’s selection to head the SEC mean for crowdfunding and the JOBS Act?

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4 things to know about crowdfunding versus raising capital

By Eric Corl for thenextweb.com

Crowdfunding is the process of raising capital by offering rewards to ‘backers’ by pre-selling your product or offering equity in exchange.

While the latter is not yet legal in the United States, the JOBS Act, which was signed into law in April 2012, mandates that the SEC makes it legal by January 1st of 2013. There will inevitably be delays as the SEC works to implement a new framework to support this legislation, but it would be wise for  entrepreneurs to start comparing equity crowdfunding with their alternative options now.

Let’s take a look at what equity crowdfunding looks like when compared to the traditional capital raising process. What I think you’ll find is that it is a great solution for the majority of entrepreneurs, especially those who have limited access to investment capital due to not being in the right industry, location or networks.

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