Those involved directly in the crowdfunding industry and businesses that have been eagerly awaiting the new crowdfunding regulations recently heard a bit of news causing a lot of cringing, heartburn and further disappointment in a system that already had a lot to prove.
The Securities and Exchange Commission (SEC) chair, Mary Schapiro, recently announced her resignation from the position, but prior to doing so; put the brakes on removing the ban on general solicitation and advertising for issuers of certain offerings. While not directly related to crowdfunding, this provision of the JOBS Act is potentially one of the most important and necessary components to eventually provide the much awaited crowdfunding regulations.
The SEC was charged to form regulations by July 4th 2012 and clearly blew through that deadline. However, for startups that are looking to utilize crowdfunding to raise early stage capital, there are a few considerations that need to be kept in mind in light of these recent developments:
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