Crowdfunding Can Help Build Business, But At What Cost?

rockethub_wide-e52cd223e8f6eaf45dd18cf2ccbe7b1f394ed410-s3-c85Entrepreneur Andy Krafsur raised money for Spira Footwear by reaching out to friends and family. But that was a dozen years ago. After the economy tanked, the common tactic became a lot more difficult.

“The pool of people that you can go to has shrunken significantly,” Krafsur says, “and everybody goes to those same people.”

Then Krafsur found a crowdfunding website that helped his cash flow enormously. The Securities and Exchange Commission is about to approve rules allowing small businesses to reach out to investors through these kinds of crowdfunding networks.

But the rules are already generating controversy. Continue reading “Crowdfunding Can Help Build Business, But At What Cost?”


New bill could finally fix crowdfunding — if the sausage stuffers don’t get to it!

sausage-v.SMPeople say that Washington, D.C. is where the sausage gets made because incentives, interests, and compromises worm their way into bills as they go through Congress.

A bill that is submitted to the U.S. House by one or more representatives must gain the support of a committee before it moves to the full house for a vote. On average, less than 1% of all bills that are submitted for consideration actually reach the President’s desk for signature. Amazingly, equity and debt crowdfunding was one of those bills. Even though what was signed into law was not perfect, it is a workable solution and Congress should be congratulated for seeing the opportunity in crowdfunding for American entrepreneurship.

In the proposed rules, the SEC ran a cost benefit analysis of the crowdfunding legislation. (You can see our take on it in this VentureBeat piece: It might cost you $39K to crowdfund $100K under the SEC’s new rules). These costs were the impetus for a legislative fix on Capitol Hill — and that bill has entered into committee.

Continue Reading

TapRaise Opens Public Beta

teaser_buttonBrooklyn, NY – April 17, 2014 – One tap, one dollar. That’s the core premise of a radically simple new donation/small payment system being opened to the public today by Brooklyn-based startup TapRaise.

TapRaise’s flagship product is the Dollar Button, the world’s simplest donation system for both fundraisers and supporters. It’s designed for anyone with an online following seeking ongoing support for their work, whatever that may be. It just takes two minutes to set up – and just one tap (or click) to give a dollar in support of someone or something you appreciate.

Because it’s so easy, the Dollar Button brings in money from people who would never have given before – and inspires people who give to give more often . From content creators like bloggers, musicians and video-makers to more traditional fundraisers – and just about anyone in between with an online following – the Dollar Button makes donations easier and friendlier than ever before.

To get your own Dollar Button right now, just visit and click on the big green button that says “Get the Dollar Button!”

Time: April 17, 2014 at 12:45 pm
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Many States Aren’t Waiting for the SEC

The Jumpstart Our Business Startups Act was signed into law in April 2012 and the Securities and Exchange Commission has been developing regulations ever since to implement the law’s provision that would allow companies to raise capital through equity crowdfunding.

Those regulations still have not been finalized.

In contrast, Georgia, Kansas, Michigan, Alabama and Maine already have laws and regulations that allow crowdfunding within the states. A new law in Washington state awaits the governor’s signature. In Wisconsin, new rules will take effect June 1 and in Indiana, new regulations become official July 1.


A dozen other states are developing crowdfunding regulations. Securities regulators in Texas are ready to announce new crowdfunding regulations, according to local news media. Connecticut has a state-sanctioned study under way.

Two states, New Mexico and Mississippi, have already considered and abandoned crowdfunding legislation.

In fact, while the SEC has sought to locate the delicate balance between making it easier for small companies to raise capital and protecting unaccredited investors, almost half the states in total have moved toward their own intrastate regulations.

“There is a level of frustration out there over the delays by the SEC, and I think the states are simply trying to plug a hole,” said Douglas Ellenoff, a partner with the law firm of Ellenoff Grossman & Schole LLP in New York.


Read more: Here