The Trouble With Crowdfunding

Jobs Act on Fox BusinessIt’s about one year since President Obama signed the Jumpstart Our Business Startups Act (the JOBS Act), designed to help new companies raise capital and go public. For individual investors the most troublesome provisions of the law relate to crowdfunding–a term not defined in the law, but popularly used to mean raising money online for a variety of purposes. Since the JOBS Act passed, crowdfunding has been on a roll. But don’t believe the hype; it is far from a start-up fundraising panacea. In the guest post below, Brian Korn, a securities lawyer with Pepper Hamilton, explains why crowdfunding is not all it’s cracked up to be.

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