Fellow Crowdfunders – What’s Holding You Up?

Well, according to our poll at Crowdfundingcentral it is all about LAW! So this is the post where will address this topic by infusing some fun and stretch our minds, just a little.

To start off - a quick disclaimer  - we are not lawyers! We certainly have relationships with some, but this post is meant to engender conversation and spark some response from our legal friends and from you. With the volume of innovation occurring in the Crowdfunding space we want to create a directory of qualified Crowdfunding lawyers that can help us (by country and issue). So please send any recommendations and we will share them with the community.

The Problem

The well documented reservations which many securities authorities harbor towards our new Crowdfunding industry (SEC in the USA, FSA in the UK etc) relate to Ponzi type operations foisted on the unsuspecting and unfortunate stretching back since the beginning of financial markets. There are rules and regulations on how organizations can solicit financial investments and more regulations will likely appear after the financial scandals of 2008 (e.g., Madoff). There is a need for Crowdfunding to be regulated, to prevent scams and protect those involved in the programs. These attitudes rightly remain fixed in the mind but stand in the way of 21^st century progress.

To help nudge our Crowdfunding movement forward we look at some suggestions (from our readers) on where Crowdfunding may work. Bear in mind that these suggestions are made to engender comments and observations from our Crowdfunding legal friends in all parts of the world; they are not intended to be advice!

Crowdfunding in the USA?

By far the biggest and most sophisticated country supporting angel, VC and financial markets Federal law seems to rule out outright online marketing for investment in return for debt or equity. Crowdfundingcentral wants to know if there any locations that an organization may be able to tap the Power of the Crowd for funding their promising ideas. Is there for instance anywhere in the 52 states where our movement would be considered beneficial or a location we could work from within the law (Native American Territories or the American Virgin Islands)? Let us know your thoughts!

Crowdfunding in Europe

Not as Big as USA but… there are lots of different laws; and attitudes differ greatly. Europe is a definitely a place where we need input from our Crowdfunding legal colleagues in the 27 European member countries. I bet the views here throw up some interesting locations where you may conceivably base your  company in pursuit of financing through a Crowdfunding operation. As you know Trampoline Systems in London has already raised GBP 1m through Crowdfunding but our legal colleagues in other countries may suggest more friendly Crowdfunding locations (e.g., Latvia, Spain, Germany)? Suggestions please!

Multi-country Complexities

We break off at this stage to consider the possibility of a Crowdfunding operation based in Europe raising capital for an operation in USA. Would the USA consider that the money raised in Europe be considered unsuitable for investment in America and also how could they practically restrict anyone in America from investing in an properly constituted company in Europe.

Or VICE VERSA!

Enough for the day from me. Lets get some input from you.