Monday, January 6, 2014

Regulation A vs Crowdfunding: What's the difference?I've been examining SEC's Reg A, the recently proposed change to Reg A, and the proposed...

Question

Regulation A vs Crowdfunding: What's the difference?

I've been examining SEC's Reg A, the recently proposed change to Reg A, and the proposed new crowdfunding ("CF") rule. Right now, I wonder what the advantage of raising money using CF is over (the proposed new) Reg A. Does anyone see any clear advantage or reason for using CR at all instead of Reg A?



Answer

As I see it, proposed new Reg. A will differ from Crowdfunding in substantial ways, and each is aimed at entirely different issuer audiences. For an analysis of the Reg. A proposal, see:

http://www.jdsupra.com/legalnews/the-sec-revamps-regulation-a-with-propos-22746/

As for crowdfunding, there are a few new paperbacks (look on Amazon, enter "crowdfunding") that attempt to analyze how and where it is suitable for use in financing business. I have bought four of them that looked useful, but haven't begun to read them yet.



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