House Hearing On Crowdfunding & The JOBS Act Critical Of Rules As Proposed

A House committee hearing on crowdfunding and the JOBS Act took place today featuring testimony from…

  • Jason Best, Crowdfund Capital Advisors partner
  • DJ Paul, Chief Strategy Officer of Gate Global Impact and CFIRA co-chair
  • Daniel Gorfine, Director of Financial Markets Policy at the Milken Institute
  • Mercer Bullard, President and Founder of Fund Democracy, Inc.

Consider these quotes from the submitted testimonies of the participants…

The title of this hearing poses the question: SEC’s Crowdfunding Proposal: Will it Work for Small Businesses? I am afraid that the answer is probably “no.”Mercer Bullard

For issuers and intermediaries, there are concerns that Title III’s statutory requirements coupled with the SEC’s use of its discretion to propose additional requirements, constraints, or potential liability exposure may at times result in the cost exceeding the benefit of this capital-raising tool.Daniel Gorfine

The question for the United States is: will we put ourselves on a competitive playing field or will we restrict our economic opportunities by over regulating one of the most important new opportunities for small businesses in a generation?Jason Best

These overly onerous requirements for the Third Tier of security crowdfunding offerings may have the unintended effect of pushing potential issuers away from doing Title 3 crowdfunding offerings above $500,000 entirely, and instead will make Regulation D offerings more attractive to potential issuers.DJ Paul

In short, this is an organized effort to highlight financial disclosure requirements some view as too onerous and having the potential to render the entire crowdfunding exemption underutilized.

The full testimonies are below…

DJ Paul – Testimony for the House Committee on Small Business

Jason Best – Testimony for the House Committee on Small Business

Daniel Gorfine – Testimony for the House Committee on Small Business

Mercer Bullard – Testimony for the House Committee on Small Business