Before I start, I wanted to say thanks again for 1,000 unique visitors! That’s pretty incredible, and I might actually be able to make it through the next 27 articles if this keeps up!
I’m super far behind on the daily articles I need to be doing to get 30 in 30 days, but I’m confident I’ll crank out like 10 of them in one day eventually.
I was going to write a part 2 to the “How to Start and Run Your Own Business” series (you can find the last article here), but those things take an inordinate amount of time. Here’s an article I’ve been thinking about writing for a while.
What is Title III: Equity Crowdfunding?
- It’s a small section included in the JOBS Act of 2012,
- It legalizes venture capitalism online. You give a company your money, they give you equity in their company. Welcome to Investing in the 21st century.
Why is it Important?
- It regulates the industry, making sure you don’t get robbed blind (yes this has happened several times in the past from what I understand).
- People not living in San Fran or NYC now have a chance of finding the next Google or Instagram or FaceBook.
- An ENTIRELY NEW MARKET has just opened up. That means a select few people are going to become a whole lot richer. I just can’t wait for banks to start insuring these online VCs because, “it’s got 0 downside and is easy money, and call the insurance CDIs (I’m taking a jab at corps. like JP Morgan and Lehman who offered insurance on Toxic Mortgages and got screwed in 2007).
- Companies now don’t need to be based in Silicon Valley and can raise capital extremely easily.
If you’ve ever wanted to become a VC this is the golden opportunity you’ve been waiting for right?
Not quite. Title II and Title IV are both severely less regulated and are more enticing to companies that want to raise capital quickly. Title IV crowdfunding lets you IPO after you reach your target capital goal. Title II has no restriction on how much money you can raise. However, the risk for fraud is much higher.
It is up to the industry to decide which way it will go in terms of what it does with crowdfunding and online Venture Capitalism, but it seems to me that Title III is the most risk free for investors, so that is what I’d guess investors want, but Title II seems more company friendly, so that’s what business owners would want.
If you’re interested in becoming an online VC, check out these websites:
On May 16, 2016, you will no longer need any sort of accreditation at all to join these sites and invest in up and coming businesses.
I hope you liked this post! Be on the lookout for an article tomorrow!