Dan Miller, co-founder of Fundrise and founder of Myrtle Grove Ventures, has released a statement saying, “online finance and equity crowdfunding, in particular, will see significant and international growth over the next 10 to 20 years.”
Miller highlights Title III of the JOBS Act, also known as Reg CF, as a catalyst for this transformation in the US. Miller believes Reg CF is making it easier for SMEs to raise funds and smaller investors to participate in their progress. SMEs are the “engines of the American economy.”
This transformation is not limited to the US as this transformation is a global movement. Recent regulatory changes have facilitated investment crowdfunding in countries such as the United Kingdom, Germany, France, Italy, Spain, Portugal, Australia, New Zealand, and now the U.S.
“It’s amazing to watch all the crowdfunding legislation take shape around the world,” stated Miller. “The regulation nuances happening now are setting the stage for this growing movement, with the U.S. and U.K leading the way. Potential global hubs such as Switzerland and Singapore are now changing their regulation infrastructures. It will be beneficial that legislation being implemented globally will likely retain 80%-90% of the initial regulations. There is no other legislation being enacted like this on a global scale.”
Miller referenced a statistic that indicates that prior to to the JOBS Act, 94% of US citizens were excluded from investing in private companies as they were not considered accredited investors. Under current rules, accredited investors must have an annual salary of at least $200,000 or a net worth of $1 million (primary residence not included). Beyond the shortsighted definition of an accredited investor, 99% of all US companies are privately held. Under the new JOBS Act rules, investment crowdfunding will still be tightly regulated. Funding portals must be licensed by the SEC with oversight by FINRA. But these new securities exemptions and portals represent a new path for entrepreneurs to raise growth capital
“Title III gives Americans more investing opportunities, which shifts the types of assets they want to invest in. I believe the projects most likely to succeed through online investment crowdfunding will be those that connect on an emotional and personal level with investors and that eventually crowdfunding will grow to the point where companies can tap their consumers to raise capital across a multitude of asset classes.”
While it took more than 4 years for the SEC to finalize JOBS Act rules with Reg CF becoming actionable in May of this year, we are still at the very beginning of a major global shift in world finance, according to Miller. “This will prove to a be a turning point. In the next ten to twenty years, the result will be diversified economies and smaller firms in the space.”
Miller launched Myrtle Grove Ventures following his departure from Fundrise – the first real estate crowdfunding platform to launch in the US. Myrtle Grove Ventures focuses on Fintech and investment crowdfunding sectors. The company plans on launching and investing in new Fintech startups in the coming months.