SEC now says Social Media OK for Company Announcements

The announcement is considered a big win for equity crowdfunding by some equity crowdfunding investors.

Yesterday, the SEC recognized social media as an acceptable way to distribute information to shareholders. In the press release the SEC referenced the company Netflix in which spurred the question of whether or not it was ok to submit company announcements via social media. So what could this mean for equity crowdfunding investors?

Although Netflix is no longer a start up company. The news from the SEC to allow companies to submit company announcements via social media is a great step forward for investing in equity crowdfunding and equity crowdfunding sites. Virtuous Vodka a startup that received funding from the equity crowdfunding site “Funded by Me” out of Sweden currently has a private Facebook group for all equity crowdfunding investors. Below highlights the Pros and Cons of investing in equity crowdfunding companies that utilize social media.

Pros:
– Distributing company announcements via social media can be much cheaper for the company. (no one reads snail mail anymore these days anyway)

–  Quicker distribution. It doesn’t take much to write a facebook post. The CFO could even post from a cell phone to alert all equity crowdfunding investors)

– Additional collaboration with stakeholders all together in one place on the internet can produce ideas, suggestions, and additional resources for increased company success, as an equity crowdfunding investor this can be huge especially in small startup companies.

– Equity crowdfunding sites will bring a lot more investors. Social media announcements could get you the information faster than the competition.

Cons:
– Not every equity crowdfunding investor has a Facebook or wants one either.

– With easy access to investors, companies can send information overload. (Not that we don’t want to hear about the CEO’s grand daughters dance competition, but that might be information overload)

– Security issues can easily arise. While Facebook is actually somewhat secure. It wouldn’t take much for information to get in the wrong hands with that savy equity crowdfunding investor leaves his social media account open on a public computer and forgets to log out.

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LEADING THE WAY IN FILM CROWDFUNDING

Crowdfund leader launches film crowdfunding management services, starting with eight films and top indie film companies such as MadChance.

 LOS ANGELES, April 2, 2013 /PRNewswire-USNewswire/ — Today David Marlett , working under his banner BlueRun Crowdfund, a division of BlueRun Media (BlueRun), announced the recent launch of the world’s first full crowdfunding services firm for the film industry,including announcing some of BlueRun’s current clients and eight ongoing or soon-to-start crowdfund campaigns.
“The success of Veronica Marswith crowdfunding has certainly placeda megawatt spotlight on the power of this funding source for somefilms,” said Marlett, a filmmaker, attorney and one of the leaders of thecrowdfunding industry. “It’s great to be helping our clients tap into thisexciting new resource and connection with their audience, especiallynow that we’re seeing a movement toward major talent involvement.”
“It’s great to be helping our clients tap into this exciting new resourceand connection with their audience, especially now that we’re seeing amovement toward major talent involvement.”