CrowdBouncer announced the beta launch of its first product in their Platform-as-a-Service solution for equity crowdfunding portal compliance and back-end transactional tools.
The Title 3 Database is a solution for portal compliance with section 302(a) of the Jumpstart Our Businesses Act (“JOBS Act”), the legislation that authorized equity crowdfunding. The database is a centralized, API-driven repository for transactional information that assists equity crowdfunding portals in ensuring that investors are within certain regulatory limits imposed by the JOBS Act.
CrowdBouncer’s business focuses on compliance and other back-end services to help equity crowdfunding portals create compliant user experiences and closing processes that are competitive with broker-dealer operated sites. The company has filed for patent protection on its proprietary technology and has several follow-on product offerings on its development roadmap, including the ability to generate closing documents and deliver escrow services through a licensed escrow agent on an automated basis through its API. It has begun partnering with key industry and technology leaders to deliver these services through its API.
Bob Carbone, CrowdBouncer’s founder and CEO, commented: “The JOBS Act is a tremendous potential boon for very early stage companies seeking capital. However, it impacts crowdfunding portals in a number of ways that constrains their ability to create compliant, uninterrupted user experiences from beginning-to-end of an offering. Our goal is to provide portals with the necessary tools to compliantly create a 4-click subscription process for investors: create account, review disclosures, sign documents and consents, and fund/checkout. Over the course of the next several weeks, CrowdBouncer will be launching these transactional services to complement the compliance resources of the API.”
Brian Fending, technical co-founder and CTO, commented: “Crowdfunding portals serve both investors and issuers, and can do so with relative ease using our platform in a single API implementation. Providing the right tool at the right time to everyone involved in a transaction is a real challenge – ours are the tools that will enable the market and help to ensure its stability.”
The JOBS Act, which was enacted in 2012, made radical changes to the regulatory environment for private placements so as to allow equity crowdfunding under a new exception, as well as authorizing the use of general solicitation in offerings that continue to rely on Rule 506 of the Regulation D exemption. As a result, the landscape for private placements will be much more democratized, allowing ordinary investors to participate in private placements and providing entrepreneurs with expanded and more cost effective options for raising capital.