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PC Magazine: As follow-up to its initial story, part 2 of PC Magazine’s coverage addresses how Reg CF is only one side of the equity crowdfunding coin, which also includes something known as Regulation A+ (Reg A+). To start, equity crowdfunding means online investors actually get a stake in the start-up or SMB as opposed to traditional nonprofit crowdfunding platforms like Kickstarter and Indiegogo, which are easy ways to lose your money. Reg CF and Reg A+ are part of the 2012 Jumpstart Our Business Startups (JOBS) Act, which has been reworked and updated over the past several years to address the crowdfunding economy and encourage new forms of protected, regulated start-up and SMB funding and investment. Reg CF is Title III and Reg A+, which went into effect in 2015, is Title IV.
Jeff Koeppel, Of Counsel with the Law Offices of Kirk Halpin & Associates, P.A, advises public and private companies on private equity and debt issuances, corporate governance, contracts, deal structuring, joint ventures, and other corporate and securities matters. He said as this space matures, Regulation Crowdfunding will be particularly helpful to mature small businesses with a financial track record and a solid local presence seeking to raise a small amount of capital. Maybe it’s hiring new employees or expanding to new local retail locations, or maybe a manufacturer wants to expand the factory floor or buy new equipment.
“These are the folks whose bank line of credit was cancelled in the last financial downturn or who don’t want to pay the rate being charged. It may be a local music store, dry cleaner, or even an auto repair shop that just needs a few hundred thousand dollars to open a store in another neighborhood,” said Koeppel, who also spent three years at the SEC as a Senior Attorney-Advisor in the Division of Corporation Finance…KEEP READING