Equity Crowdfunding: Risk, Reward, & Regulation
A Regulatory Transparency Project Fourth Branch Video
A Regulatory Transparency Project Fourth Branch Video
In April 2012, President Barack Obama signed into law the Jumpstart Our Business Startups (JOBS) Act. One aspect of the Act, implemented by the Securities and Exchange Commission (SEC) in 2015, was the elimination of net worth and income requirements for investors seeking to participate in "equity crowdfunding," a mechanism through which businesses raise capital from large numbers of individual investors via online platforms.
In the years since, equity crowdfunding has taken off, leading to much debate over how the SEC ought to regulate it. In this Fourth Branch video, industry professionals and legal and financial experts break down equity crowdfunding and debate how regulators can most effectively foster innovation while preserving investor safety in the space.
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As always, the Federalist Society takes no position on particular legal or public policy issues; all expressions of opinion are those of the speaker.
Chief Executive Officer, Equifund Crowd Funding Portal
Jordan Gillissie is Founder and Chief Executive Officer of Equifund Crowd Funding Portal, a crowdfunding portal registered with the Securities and Exchange Commission and Financial Industry Regulatory Authority. Equifund CFP provides a platform where entrepreneurs and investors can connect and transact in a frictionless environment.
Chief Executive Officer, CrowdCheck
Sara Hanks, co-founder and CEO of CrowdCheck, is an attorney with over 30 years of experience in the corporate and securities field. Sara brings a wealth of legal expertise in securities law and start-ups to the emerging marketplace for crowdfunding and online capital formation. CrowdCheck provides due diligence, disclosure and compliance services for online capital formation, helping investors get the information they need to avoid fraud and make informed investment decisions, and helping entrepreneurs and intermediaries avoid liability.
Her position prior to founding CrowdCheck was General Counsel of the bipartisan Congressional Oversight Panel, the overseer of the Troubled Asset Relief Program (TARP), chaired by now-Senator Elizabeth Warren. At the Congressional Oversight Panel, Sara spent 18 months on Capitol Hill investigating the implementation and consequences of the TARP in depth. She examined the government’s intervention in the automotive companies, the execution of the banking “stress tests,” the rescue of AIG, and the international aspects of the financial crisis.
Chief Crowdfunding Data Analyst, Crowdfund Capital Advisors
Sherwood Neiss is a Principal and Chief Crowdfunding Data Analyst at Crowdfund Capital Advisors, a Partner at Crowd Capital Ventures, and a co-founder of GUARDD, Inc. He is an expert at building successful businesses. As a 3-time INC500 winner whose former company won E&Y’s Entrepreneur of the Year, Sherwood understands the keys to entrepreneurial success from concept to company to capital to sale.
As a serial entrepreneur and investor during the 2008 recession, Sherwood saw a need for a change in outdated securities laws and did something about it—as a co-founding member of Startup Exemption, Sherwood co-authored the Crowdfunding Framework used in the JOBS Act. He was invited to the Rose Garden by President Obama on April 5, 2012 when the bill was signed into law.
Within Crowdfund Capital Advisors (CCA), Sherwood works with clients ranging from governments and banks that are looking for ways to boost economic development in their countries to investment firms looking for access to increased deal flow that crowdfunding creates. As the Chief Data Analyst he oversees a team responsible for aggregating data from all registered offerings taking place on Online Investment Platforms and bringing that over to Bloomberg. At Crowd Capital Ventures (CCVF), Sherwood researches, analyses and invests in promising FinTech companies focusing on all sectors of the crowdfunding market. And at GUARDD, Sherwood helps issuers navigate around Blue Sky laws as they relate to secondary trading of exempt, unregistered securities.
Sherwood serves as an advisor to several crowdfunding platforms and crowdfunding technologies giving him a unique understanding and view of the industry and market. As an industry leader, Sherwood contributes to several publications including VentureBeat and TechCrunch. He additionally co-authored Crowdfund Investing for Dummies through Wiley & Son’s as well as the World Bank Report Crowdfunding’s Potential for the Developing World.
Sherwood co-founded Crowdfund Intermediary Regulatory Advocates (CFIRA) and the Crowdfunding Professional Association (CPA), and served as Governing Board Member and co-chair where he led the fight to ensure investors are protected while entrepreneurs have access to the capital they need to start and grow promising companies.