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Jumpstart Our Business Startups Act – Reviewing Some Regulation Crowdfunding Issues

Jumpstart Our Business Startups Act – Reviewing Some Regulation Crowdfunding Issues
The groundbreaking Jumpstart Our Business Startups Act (JOBS Act) was signed into law in April 2012. Its purpose was to motivate startup and small business funding throughout the nation. Title III of the Act, also known as Regulation Crowdfunding (Reg CF), made the acquisition of capital easier for businesses, and gave more people the option to participate in various investment opportunities – all with the goal of stimulating economic growth and creating jobs. Reg CF made it possible for the little guy, so to speak, to participate in investment opportunities involving startups and small businesses. Prior to Reg CF, these investments were only available to investors with certain relatively high levels of annual income and net worth. The Issues Although Regulation Crowdfunding of the Jumpstart Our Business Startups Act took effect in May 2016, there have been difficult issues inhibiting the ability of potential issuers to take advantage of the new law. One issue involves the requirement on businesses seeking to raise more than $500,000 in capital to have GAAP standard financial statements prepared to share with prospective investors. This regulation is burdensome for small businesses that may not have the funds to pay for the preparation of these documents. Additionally, Reg CF is a complex and lengthy document that requires legal examination to ensure its requirements are met. As well, Reg CF of the Jumpstart Our Business Startups Act mandates that issuers, prior to raising capital, file a Form C with the SEC. This document is complicated and requires review from an attorney prior to submission. Again, many startups and small businesses do not have the available funds to cover the legal expenses associated with the required review. There is also a $1 million per year fundraising cap on businesses – too low for certain small businesses and industries that need larger amounts of capital at the outset. Another problem under the Reg CF provisions of the Jumpstart Our Business Startups Act is that issuers are not permitted to test the waters of the market, so to speak, by putting out nonbinding solicitations in order to at least test potential interest without first providing the required disclosures to the SEC. Possible Solutions A Fix Crowdfunding Act passed the House of Representatives in 2016 to help solve some of the issues mentioned above, however the bill stalled in the Senate.  * Some of the solutions that may be provided with a new bill are as follows.  * Raise the issuer cap from $1 million to $5 million  * Allow potential issuers to test the waters of the market and thus reduce the upfront costs of carrying out a Reg CF offering  * Base the percentage caps of investors on the greater of income and net worth, and not the lesser of those factors  * Lessen the burden on funding portals to evaluate Reg CF offerings they post for potential emissions are misstatements of issuers. Liability should only be imposed upon these portals if they purposefully and intentionally allow misstatements and/or omissions from the issuer, or knowingly engaged in fraudulent activity in some other way. As is obvious, the Reg CF provisions of the Jumpstart Our Business Startups Act need improvement. Hopefully these issues will be addressed soon to help enhance opportunities for both issuers and investors. 1 person likes this post. Like...
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Sell Bitcoin in Chicago at an ATM!

Sell Bitcoin in Chicago at an ATM!
You may not be aware, but you can sell your bitcoin in Chicago at an ATM! The process is simple and takes minutes. You do not have to go through a broker and you do not have to pay inflated fees to sell your bitcoin, all you need is the location of the ATM to sell your bitcoin fast and easy. It is Genius While bitcoin is not your traditional currency there is no reason that it can not be simplified for everyone to take advantage of this currency. Bitcoin is cryptocurrency that is on the rise in popularity. More vendors than ever are accepting them as payment including some very popular shopping sites like Amazon, Etsy and others. More people are showing an interest in bitcoin trading. It is a genius to make the process of buying and selling bitcoins at something as familiar as an ATM! Opportunity One of the best reasons to use an ATM to sell bitcoin is because it allows you to take advantage of an opportunity quickly. Bitcoin value has historically grown in value, and while there are thousands of merchants that accept bitcoin as payment, there are some occasions that you just need traditional cash. The process is quick and easy: 1. Choose to sell at the ATM menu 2. Receive SMS code to your phone 3. Enter the code 4. Choose the amount you want to sell 5. Get QR code to trade for cash This simple yet effective way to sell your bitcoin is a great way to take advantage of the potential growth of bitcoin and cash it out right at the ATM. While this is a relatively new idea right now, it will be the way bitcoins are managed in the future.  Contact http://rockitcoin.com/ is right on time with their bitcoin ATM’s, look for one near you! 1 person likes this post. Like...
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Necessary Requirements to Become an Accredited Investor

Necessary Requirements to Become an Accredited Investor
Accredited investors enjoy a wealth of finances and privileges regarding how they can invest said finances. If you’ve come to the point where you qualify for such a status, or believe that you do, it’s important you know exactly what those qualifications are. The world of investment is vast and complicated. Anyone preparing to participate in it more deeply should have the best information available. That said, here are some of the most significant accredited investor requirements. What Are Accredited Investors? According to US Securities Law, an accredited investor can be an entity or a natural person. With respect to natural persons, it is generally someone who earns a yearly income of $300,000 (if married, and in conjunction with their partner) or $200,000 (if single, or married, but verifying only himself or herself). This income must have been maintained for a minimum of two straight years, and there must be a reasonable expectation of achieving such income in the current calendar year. Alternatively, the individual individually must have a net worth exceeding $1,000,000, or together with his/her spouse must have a net worth of $1 million or more. Do You Have to Apply? No, not generally. Either you are an accredited investor, or you’re not. In fact, you won’t see any real documentation until you apply for your first large-scale investment. The securities company in charge of handling your investment will give you a survey to complete once you get started with the investment process, which is how they will know whether or not you meet the necessary accredited investor requirements. Some deals will require verification of your accredited investor status; the process is a bit cumbersome and annoying, but necessary for you to invest in those deals. Are There Any Other Steps to Take? Other than possible verification for some deals, the answer is another solid no. Once you’re recognized as meeting all accredited investor requirements, all that’s left for you to do is invest! One of the best things about being an accredited investor is the stark amount of investment options available to you. There are numerous resources available to help you learn as much as you can as you embark upon this new venture. Be the first to like. Like...
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