Category Archives: Crowdfunding Portals

Simple Wholesaling Podcast: Raising Money Online for Your Deals & More

CLICK HERE TO LISTEN

Mark Roderick appeared on the Simple Wholesaling Podcast to talk about crowdfunding and the laws and logistics of raising money online.

In this episode, Mark discusses:

  • Mark’s story
  • Raising capital online
  • Businesses that have been very successful
  • How entrepreneurs and the consumers are protected online
  • Portals he recommends
  • Where people should start if they’re interested to try crowdfunding
  • The “don’ts” when trying to raise money on the Internet
  • What accredited investor means
  • The types of returns entrepreneurs pay out to their crowd investors
  • The effects on the stock market when we have many options to invest in different things

The Exchange with KB: Crowdfunding, Blockchain & Cryptocurrencies

CLICK HERE TO LISTEN

Mark Roderick appeared on The Exchange with KB podcast with host Kirill Bensonoff, where he discussed Crowdfunding, Blockchain & Cryptocurrencies. In this episode, Kirill and Mark discussed the JOBS Act, Title II Crowdfunding, Accredited Investors, Regulation Crowdfunding, why we need investment regulation, the future of cryptocurrency, Libra and other blockchain tech and cryptocurrency, and legislation regarding blockchain and crypto.

The Cashflow Hustle Podcast: Crowdfunding Techniques to Level Up Your Business

CFH47_Mark Roderick.png

CLICK HERE TO LISTEN

Mark Roderick appeared on the Cashflow Hustle Podcast with Justin Grimes, where he discussed Crowdfunding Techniques to Level Up Your Business.

In this Episode, You’ll Learn About:

1. The Crowdfunding and its flavors
2. The deductions in Crowdfunding
3. The role of SEC
4. Blockchain technology in Crowdfunding
5. The Investor portals
6. Tokenized security in Crowdfunding

Questions? Let me know.

The Wealthy Wellthy Podcast: What You Don’t Know About Crowdfunding

The Wealthy Wellthy Podcast: What You Don’t Know About Crowdfunding

2019-06-20_10-54-52

CLICK HERE TO LISTEN

Our guest on this episode of The Wealthy Wellthy Podcast is Mark Roderick, an attorney who devotes most of his time to crowdfunding. Maybe you are like me in thinking that crowdfunding is pretty straightforward and self-explanatory. I mean, if your friend is looking to start a business and you want to support them, you can donate or invest through their crowdfunding page online and that’s that, right?

Every entrepreneur faces the stage in their business where they need to acquire capital, either from acquaintances, networking, angel investors, venture capitalists, or strategic partners. This process is messy and confusing, filled with regulations and stipulations that may make acquiring the capital more trouble than it is worth. This was partially due to the antiquated laws that were created in the aftermath of The Great Depression and were stifling in the modern economic climate. However, in 2012, the Jobs Act made it legal for entrepreneurs to advertise to raise capital. This opened up a whole new world for small business owners and others who were desperate to be able to connect more easily with potential investors as well as investors who were eager to find new opportunities.

During the interview, Mark distinguishes between the 3 kinds of crowdfunding: (1) to accredited investors only, (2) Regulation A to accredited or non accredited investors, and (3) Title 3 – which is the most common. He also talks about the factors that are most important from a legal perspective when you are determining which crowdfunding site to use to raise capital or to invest capital. It was also interesting to hear Mark spell out the 3 reasons why people invest through crowdfunding: (1) they want to support the company, (2) to do social good, and (3) to make money.

Mark even gave me some advice about a real estate deal I am considering and revealed that 90-95% of the capital exchanged through crowdfunding is for real estate transactions. Finally, he busted a couple of myths regarding the amount of risk involved in crowdfunding and whether money raised from others is subject to securities laws.

What We Covered

  • [2:16] – Who is Mark Roderick?
  • [3:28] – Mark describes the fragmented traditional ways of raising capital.
  • [8:58] – Angel investors and how to present your “deck” to them.
  • [11:08] – Working with venture capitalists and strategic partners.
  • [13:31] – A brief history of the laws affecting capital.
  • [22:34] – What does crowdfunding look like for startup entrepreneurs?
  • [27:20] – How to find a regulated site to post your capital request on.
  • [30:58] – Crowdfunding is the intersection of old and new school.
  • [34:57] – Advice to keep in mind when you are using a crowdfunding site.
  • [38:06] – Mark tells us 3 of the crowdfunding sites he works with.
  • [40:08] – When should an entrepreneur hire an attorney during this process?
  • [42:40]– The prevalence of real estate in the crowdfunding world.
  • [53:24] – What message does Mark want to get out there?
  • [56:17] – Mark busts 2 myths about crowdfunding.

Questions? Let me know.

Trouble In Paradise: Lending Club And Prosper

Lending Club and Prosper are going through a rough patch. Renaud Laplanche, the CEO and founder of Lending Club, just resigned amid allegations of financial irregularities, while Prosper recently laid off more than a quarter of its employees.

But those are only the ripples on the pond’s surface. What’s going on underneath is that Wall Street is losing faith in the business model – that is, losing faith in the quality of the loans made on the Lending Club and Prosper platforms.

Not long ago, Wall Street financial institutions couldn’t get enough of Lending Club and Prosper loans. Now the same institutions are cutting back and the effect is severe.

To me, there are two lessons.

This is a Brand New Business Model, and It’s Going to be a Bumpy Ride

Marketplace lending started with the observation that banks pay much less interest to depositors than they charged to borrowers, and that technology should allow someone to decrease that spread, making a profit in the bargain. Lending Club and Prosper grew by substituting proprietary algorithms for traditional bank due diligence. The algorithms seem to work,and institutional investors rushed in.

But marketplace lending has been around for less than 10 years and nobody knows how the algorithms will perform during a down cycle. It’s not a big surprise that Wall Street money managers, aware that the economy might be due for a downturn, are hedging their bets.

The fickleness of Wall Street money managers doesn’t mean the business model of Lending Club and Prosper is broken. To me, there is little doubt that algorithms and big data will replace traditional bank due diligence – not only in consumer lending, but in other parts of the Crowdfunding ecosystem as well. But the algorithms and business models might well have to be adjusted, and nobody should expect a straight line from A to Z.

The fickleness of Wall Street money managers leads to the second lesson.

Wall Street is Fickle

Soon after launching a Crowdfunding platform, you realize there’s a choice where you look for investment capital. You might have begun with the idea of raising money from the public – that is, from retail investors – but you realize quickly that you can also raise money from institutions.

Raising money from institutions is often much easier because, well, institutions have more money. But there are a couple downsides:

  • You started off hoping to become a household brand, but if most of your money comes from institutions you risk becoming merely a deal originator for institutions, with far less clout and long-term brand value.
  • You started off idealistically hoping to bring high-quality investments to the public, but if most of your money comes from institutions, you aren’t.

The experience of Lending Club and Prosper reveals another downside: Wall Street is fickle. If you build your Crowdfunding business based on large investments from a handful of institutional investors it’s a lot of fun on the way up, but when the institutions pull the plug it’s a hard fall.

Ideally, a Crowdfunding platform can have it both ways, using institutional money to build the business while building its brand with the retail public, to the point where the business can survive and prosper even if institutional tastes change. I don’t know whether that’s possible, but I hope so.

Questions? Let me know.

The Liability Of Issuers In Crowdfunding (Parental Discretion Advised)

You’re thinking about raising money using Crowdfunding, but are concerned about legal liability. Here is a non-exclusive list of ways you can be liable as an issuer.

When I say “Exchange Act” I mean the Securities Exchange Act of 1934, and when I say “Securities Act” I mean the Securities Act of 1933. The “CFR” is the Code of Federal Regulations.

Rule 10b-5

17 C.F.R. §240.10b-5, issued by the SEC under section 10(b) of the Exchange Act, makes it unlawful, in connection with the purchase or sale of any security, to:

(a)  To employ any device, scheme, or artifice to defraud,

(b)  To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or

(c)  To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person.

Back in 1946, courts established a “private right of action” under Rule 10b-5, meaning that an investor who has been damaged by a violation of Rule 10b-5 can sue the person who made the misstatement. That often means the issuer, but can also mean an officer or other representative.

Rule 10b-5 applies to all Crowdfunding offerings.

Section 12(a)(2) of Securities Act

Section 12(a)(2) of the Securities Act imposes liability on an issuer or other seller of securities who:

Offers or sells a security. . . by means of a prospectus or oral communication, which includes an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements, in the light of the circumstances under which they were made, not misleading (the purchaser not knowing of such untruth or omission), and who shall not sustain the burden of proof that he did not know, and in the exercise of reasonable care could not have known, of such untruth or omission.

Rule 12(a)(2) applies to Title III and Tile IV, but not to Title II.

Section 17(a) of Securities Act

Section 17(a) of the Securities Act makes it unlawful for any person, including the issuer, in the offer of sale of securities, to:

(1) employ any device, scheme, or artifice to defraud, or

(2) obtain money or property by means of any untrue statement of a material fact or any omission to state a material fact necessary in order to make the statements made, in light

of the circumstances under which they were made, not misleading; or

(3) engage in any transaction, practice, or course of business which operates or would operate as a fraud or deceit upon the purchaser.

Section 17(a) applies to all Crowdfunding offerings.

Special Liability Provision of Title III

New section 4A(c) of the Securities Act extends a similar concept into Title III. A Title III issuer is liable if:

The issuer makes an untrue statement of a material fact or omits to state a material fact required to be stated or necessary in order to make the statements, in the light of the circumstances under which they were made, not misleading, provided that the purchaser did not know of such untruth or omission; and does not sustain the burden of proof that such issuer did not know, and in the exercise of reasonable care could not have known, of such untruth or omission.

This new provision defines “issuer” broadly:

As used in this subsection, the term “issuer” includes any person who is a director or partner of the issuer, and the principal executive officer or officers, principal financial officer, and controller or principal accounting officer of the issuer (and any person occupying a similar status or performing a similar function) that offers or sells a security in a transaction exempted by the provisions of section 4(a)(6) of this title, and any person who offers or sells the security in such offering.

The SEC says that even funding portal itself would likely fall within the definition of “issuer” and thus be subject to statutory liability under section 4A(c).

Section 4A(c) applies only to Title III.

NOTE: Rule 10b-5, section 12(a)(2), section 17(a), and section 4A(c) are very similar, but with a few key differences, including these:

  • A plaintiff making a claim under Rule 10b-5 must prove the defendant acted knowingly or was reckless.
  • A plaintiff making a claim under section 12(a)(2) or section 4A(c) must show only that the statement in question was false, leaving the defendant to prove that it did not know, and with the exercise of reasonable care could not have known, that it was false.
  • Section 12(a)(2) allows claims against the person who sold the security to the plaintiff. Section 4A(c), on the other hand, could impose liability on the issuer even in the case of a “secondary” sale, meaning a sale by an existing stockholder.
  • Section 12(a)(2) applies only to misstatements or omissions in a prospectus or made orally. Section 4A(c), on the other hand, applies to misstatements or omissions anywhere.
  • Section 17(a) does not provide a private right of action, meaning it’s about a penalty imposed by the SEC, not a lawsuit brought by an investor.
  • In making a claim under section 17(a), the SEC need show only negligence on the part of the defendant.

Failure to Register Offering

Section 5 of the Securities Act generally requires all offerings of securities to be registered with the SEC. All Crowdfunding offerings rely on statutory or regulatory exemptions from the registration requirement. Rule 506(c), Regulation A, intrastate Crowdfunding, Title III – these all provide exemptions from the registration requirement of section 5.

But all those exemptions are conditioned on satisfying certain requirements. To qualify for the exemption under Rule 506(c), for example the issuer must take reasonable steps to ensure that every investor is accredited and form a reasonable belief that every investor is accredited. If an issuer fails to satisfy all the requirements of an exemption, then the issuer has engaged in an illegal, unregistered offering and is liable under section 12(a)(1) of the Securities Act.

Failure to Use Licensed Broker

Section 15(a) of the Exchange Act requires any person acting as broker to register with the SEC. If an issuer sells securities through a person who should be licensed as a broker but is not, the issuer could be liable under any of several legal theories:

  • Use of an unlicensed broker could cause the issuer to lose the exemption from registration.
  • The failure to notify investors that the issuer is using an unlicensed broker could give rise to liability under Rule 10b-5 or section 12(a)(2).
  • The issuer could be liable for aiding and abetting the unlawful actions of the unlicensed brokers.

Failure of Principals to Register as Brokers

Section 3(a)(4)(A) of the Exchange Act generally defines a “broker” as “any person engaged in the business of effecting transactions in securities for others.” The issuer itself is not required to register as a broker, because the issuer is effecting transactions in securities for itself, not for others. This is commonly referred to as the “issuer exemption.”

But the issuer exemption doesn’t protect employees of the issuer who engaged in selling the issuer’s securities, including the founder, the President, the CEO, the Marketing Director, and the Director of Investor Relations. A different SEC regulation, 17 CFR §240.3a4-1, provides a limited safe-harbor exemption for these so-called “associated persons.” However, it’s not hard for an issuer’s associated persons to fail to qualify for that exemption.

If an associated person should be registered as a broker but isn’t, not only is he or she personally liable, but the issuer itself now faces all the potential liabilities associated with using an unlicensed broker!

State Common Law Rules

Issuers can be liable to investors under a variety of state “common law” (as opposed to statutory law) theories, including:

  • Fraud
  • Misrepresentation
  • Breaches of fiduciary obligations
  • Breaches of contractual obligations (g., under an Operating Agreement)
  • Breach of the implied covenant of good faith and fair dealing

State Statutory Rules

States regulate the sale of securities as well. An issuer can be liable under state securities laws for:

  • The failure to register an offering under state law.

NOTE: Suppose you’re selling securities under Title II Crowdfunding (Rule 506(c)). The starting place is that sales of securities under Rule 506(c) are not subject to state registration. But if you fail to take reasonable steps to ensure that all your investors are accredited, not only do you lose your Federal exemption, you also lose your exemption form state registration as well!

  • The use of an unlicensed broker-dealer.
  • The use of deceptive offering materials.

Criminal Rules

If an issuer really screws up, it could even be subject to Federal and state criminal penalties, including:

  • Criminal penalties for intentionally violating securities laws
  • Criminal penalties for mail fraud
  • Criminal penalties for wire fraud
  • Criminal penalties for violating the Racketeer Influenced and Corrupt Organizations

Liability of People

Entrepreneurs sometimes are under the mistaken impression that operating through a corporation or other legal entity protects them from all personal liability. For example, an entrepreneur on her way to a business meeting swerves to run over a bevy of doctors and jumps from her car, laughing. “You can’t sue me, I operate through a corporation!” she says.

No. She did it, so she’s personally liable, corporation or no corporation. If her employee did it, the story might be different (unless he was drunk when she handed him the keys).

The same is true in securities laws. Assume that if you’re running the issuer, all the potential liability I’ve described applies to you personally as well.

Is Crowdfunding Too Dangerous?

No, definitely not.

With the exception of section 4A(c) of the Securities Act, which is limited to Title III, you’ll notice that all of the potential liabilities I’ve described apply to old-fashioned private placements and public offerings, not just to Crowdfunding. Crowdfunding introduces two new variables:   the number of investors and the anonymity of investors. But the legal framework is identical.

Did I ever mention that issuers should buy insurance?

Questions? Let me know.

Title III Crowdfunding Is Here

The JOBS Act was signed into law by President Obama on April 5, 2012. The SEC was supposed to issue regulations under Title III 270 days later, by December 31, 2012. Instead, the SEC issued final Title III regulations last Friday, which will become effective around May 1, 2016, or about 1,466 days after enactment.

But better late than never! In its final regulations the SEC has again bent over backward to make Crowdfunding easier, for example:

  • Liberalizing the financial disclosures required of issuers
  • Clarifying that a Title III offering will not interfere with other exempt offerings
  • Allowing Title III portals to pick and choose among issuers
  • Allowing Title III portals to take financial interests in issuers

Hat’s off the to the SEC staff for doing excellent work with a flawed statute!

For those of you who want to read all 686 pages of preambles, regulations, and forms, here’s a link. For others, I’ve written a Title III Crowdfunding: Outline for Portals and Issuers.

This is a brave new world, the transformation and democratization of the U.S. capital formation industry. I am very, very interested to hear what all of you think.

Thanks for reading.

Questions? Let me know.

Insurance for Crowdfunding Portals

Every Crowdfunding portal should carry liability insurance. The important questions are what kind, how much, and with what terms.

Like all businesses, Crowdfunding portals should consider the following “standard” liability coverage:

  • General liability insurance (slip and fall, etc.)
  • Employment Practices Liability insurance (sexual harassment, etc.)
  • Workers Compensation and Employers liability Insurance (usually mandatory by law)
  • Excess or Umbrella Liability coverage (providing additional coverage limits for liability claims, and in the case of umbrella coverage, coverage for some claims not provided by a commercial general liability policy)

However, the “standard” coverage probably won’t cover everything a portal does. For that, a portal will need insurance specific to the world of buying and selling securities.

Someday, maybe soon, the insurance industry will create a product specifically for Crowdfunding portals and buying the right policy will be easier. But that hasn’t happened yet. Today, you have to pick a policy type that seems close – maybe a policy for managing a private investmentumbrella 2 fund – and then seek to modify the policy yourself. For example, the policy might cover making investments in portfolio companies. You would have to seek to modify that policy to explicitly cover “Raising money for debt and equity investments under SEC Rule 506 and Regulation A, and all related activities.”

Don’t assume that a “standard” policy will cover lawsuits from unhappy investors, for example. Also don’t assume that your insurance agent understands exactly what a Crowdfunding portal does. Sure, the insurance company will sell you the policy and accept the premium, but that’s only the first chapter in the story. The rubber hits the road when you’re sued and submit a claim. That’s a really bad time to find out your coverage is inadequate.

Portals should also consider:

  • Director and officer insurance, which protect the officers, directors, and managers of the entity from claims made on behalf of the entity
  • Fiduciary Liability insurance, which covers misappropriations by employees.

How much insurance should you buy? You’ve got to consider the size of your deals, how many deals you do each year, the amount of the typical investment, and the risk profile of your deals. You’ll find that the first dollar of coverage is the most expensive, while each additional dollar is relatively less expensive.

As anyone who’s been through litigation knows, being sued is very expensive. That’s why it’s critical that your insurance cover not only payment of the actual claims (if you lose or settle), but the cost of defending the claims. Sometimes the costs of defense are subtracted from the policy limits, and therefore effectively erode those limits.

EXAMPLE: Your nominal policy limit is $3 million, but defense costs are subtracted. The carrier spends $350,000 to defend a claim (yes, that’s possible). Now your policy limit is $2,650,000.

Other key points to consider in an insurance policy:

  • Whether the coverage is “occurrence” or “claims made” (the former covers all claims that relate to periods while the coverage was in effect; the latter covers only claims made while the coverage is still in effect)
  • Whether and to what extent the coverage includes “prior acts” (things that happened before the coverage was in effect)
  • The deductibles (the amount you have to pay before the insurance kicks in)
  • Whether you have the right to select legal counsel or must accept the lawyer chosen for you by the insurance company

My colleague, Mitch Kizner, spends most of his time arguing with insurance carriers about terms and coverage. If you’re wondering whether you’re covered, Mitch is a good guy to speak to. His email address is mitch.kizner@flastergreenberg.com and his direct dial is (856) 382-2247. You can also follow his blog at www.mitchkizner.com or on twitter @MitchKizner.

 

Scalability in Crowdfunding

Growing plant stepThe Crowdfunding market continues to grow rapidly, increasing in deal size, deal volume, and sophistication. The rapid growth will likely continue for the foreseeable future, as more investors and entrepreneurs learn about the opportunities. And the growth will accelerate if and when:

  • The SEC finalizes regulations under Title IV
  • Congress refurbishes Title III
  • Portals move toward pooled assets
  • Portals are created in more vertical markets
  • Deals become standardized across portals
  • Formally or informally, we get a secondary market for Crowdfunded investments

All those things will move the dial toward a larger, more robust Crowdfunding market. But to penetrate the mass market – to truly scale – Crowdfunding needs something more, and that thing is coming.

Like a telescope, a Crowdfunding portal has two ends: an investor end and a deal flow end. Today, the investor end of the telescope is almost infinitely scalable while the deal flow end has proven much more difficult. Even given the best technology and the best people, how do you push more deals through the narrow opening? More exactly, how do you perform effective due diligence on all those deals?

Look at the P2P sites, Lending Club and Prosper. They’re doing Crowdfunding, too, and they pushed more than $5 billion of consumer loans through their due diligence processes during 2014. They did it mainly by reducing due diligence to a series of algorithms. In fact, they perform so little due diligence of the old- fashioned variety that some states don’t allow them to sell securities.

Three factors have allowed Lending Club and Prosper to streamline due diligence and scale up:

  • They started with a built-in technology for determining a consumer’s creditworthiness: namely, a FICO score.
  • Starting with FICO scores, they created their own proprietary scoring systems using their own data. The more data they accumulate the better their scoring systems become, in a virtuous cycle.
  • They have educated their investors. Rather than allocate their entire investment to a single loan, investors diversify, trusting the averages.

In some respects what Lending Club and Prosper have done with consumer debt is no different than what Billy Beane did with baseball players: replacing a traditional process that relied on human expertise (scouts) with a new process that relies on data (sabermetrics).

At first glance, the typical Title II Crowdfunding site, whether real estate sites like Patch of Land and iFunding or venture capital sites like FundersClub, look a lot different than a P2P site. Fundamentally, however, they are in the same business. The question is not whether Title II (and Title III and IV) sites will move toward the P2P model, the question is is how quickly and in what ways.

I believe the convergence will happen from both ends.

First, portals are going to create the equivalent of FICO scores and the scoring systems of Prosper and Lending Club, even for complex real estate projects and hi-tech startups. Living in a world of big data, I believe this is not only possible but inevitable. As we speak, lots of smart people are looking at lots of data and trying to draw meaningful correlations between data and outcomes.

Is there a correlation between the FICO score of a real estate developer and the success of his next two projects? If an entrepreneur has had one successful exit is she more likely to have a second? If an angel has invested in three successful deals is he likely to have a fourth?

The world is flooded with data and fast computers. I believe Crowdfunding portals will crack the code, a little bit at a time, moving from a traditional, hands-on due diligence process to a data-driven, algorithmic process. Like old-time baseball scouts, those comfortable with the traditional processes are likely to cry foul, pointing out the inevitable gaps in statistics. They’ll be right in a narrow sense, but the world will move on nonetheless.

Second, because of the pressure to scale, portals will gravitate toward products that lend themselves to being scaled. It’s not a coincidence that Lending Club and Prosper sell consumer debt! The market suggests that real estate debt is likely to be the next product to scale, with real estate equity going to the back of the line. Going a step further, I’m guessing that the more difficult to crack the code in a given product, the higher the margin and the lower the volume.

If I knew exactly how the market will play out I wouldn’t be a lawyer! Nevertheless, it’s an incredibly exciting time.

Questions? Contact Mark Roderick.

Crowdfunding Is Just the Internet

red mouse with money and comment

Fortunately for me, there are a lot of complicated legal issues around Crowdfunding, including:

  • The differences among Title II, Title III, and Title IV
  • The differences between Rule 506(b) offerings and Rule 506(c) offerings
  • The differences between accredited investors and non-accredited investors
  • The Trust Indenture Act of 1939
  • The Investment Company Act of 1940
  • Applying broker-dealer and investment adviser laws to Crowdfunding portals

But at a higher level Crowdfunding isn’t complicated at all. Crowdfunding is just the Internet coming to the capital formation industry.

What happens when the Internet comes to an industry? Look at the publishing industry and the travel industry and the music industry and, increasingly, the entire retail industry:

  • Buyer and sellers connect directly
  • Middlemen are displaced
  • Prices decrease as the industry becomes more efficient
  • The middlemen being displaced are sure it won’t happen as it’s happening
  • In the end, the industry looks completely different and we all take it for granted

In Crowdfunding, the “sellers” are entrepreneurs and real estate developers seeking capital and the “buyers” are investors. The middlemen are the lawyers, bankers, finders, brokers, venture capital funds, investment advisors, and all the others who for the last 80 years have played an indispensable part in connecting entrepreneurs with investors. Today, for the first time, entrepreneurs and investors can connect directly, via the Internet. The middlemen have already started to be pushed to the side. The picture in my mind is an ice field slowly breaking apart as temperatures warm.

People sometimes ask whether Crowdfunding will last. I respond “When was the last time you planned a vacation through a bricks-and-mortar agency?” The Internet is here to stay!

The capital formation industry is enormous – far, far bigger than the book selling industry or the travel industry. And the middlemen in the capital formation industry enjoy far greater political power than Barnes & Noble. But in the end, resistance is futile.

As you’re planning and managing your own portal, or any other Crowdfunding business, pause every now and then and remember that for all the legal complexity, for all the nuts-and-bolts, day-to-day grind of generating cash flow, Crowdfunding is nothing more or less than the Internet come to the capital formation industry.

Questions? Contact Mark Roderick.

%d bloggers like this: