What does the crowdfunding sector look like from a legal perspective? How do recent and previous laws passed by Congress impact startup entrepreneurs and crowdfunding campaigns? Here to give his unique take on the subject is one of the leading crowdfunding and financial technology lawyers in the United States, Mark Roderick. In his conversation with Roy, Mark opens up about the JOBS Act of 2012, the pros and cons of equity crowdfunding, various liability concerns that startup entrepreneurs should keep on their radar and much more. You don’t want to miss a minute of this engaging episode featuring Mark!
Who is Mark Roderick?
Mark Roderick has enjoyed a robust career representing entrepreneurs and their businesses successfully for more than 25 years. He serves companies across a wide range of industries, including the technology, real estate and healthcare industries. Leveraging his in-depth knowledge of capital raising and securities law, Mark is spearheading Flaster/Greenberg's crowdfunding practice. Mark is passionate about encouraging and equipping business leaders so the crowdfunding sector can continue its upward momentum. Learn more about Mark and his fascinating legal perspective by checking out the link to his blog located in the resources section at the end of this post!
Three types of crowdfunding created by the JOBS Act of 2012.
Have you heard of the JOBS Act of 2012? Do you know how that law impacted the crowdfunding sector? Thankfully, attorney Mark Roderick was kind enough to break it all down in an easy to follow approach. The JOBS Act created three types of crowdfunding.
Title two of the JOBS Act allows companies to use the internet or other mediums to advertise their security offerings.
Title three of the JOBS Act allows a company to make securities offerings to non-accredited investors.
Title four of the JOBS Act, also known as, “Regulation A” allows an issuer to raise up to 25 million dollars a year from anyone (both accredited and non-accredited investors).
To hear Mark expand on his insights from the JOBS Act of 2012 and much more, make sure to listen to this episode, you don’t want to miss it!
The pros and cons of equity crowdfunding.
How should startup entrepreneurs like you view equity crowdfunding? Are there specific scenarios that equity crowdfunding is right for rather than others? According to Mark Roderick, equity crowdfunding is good for businesses that have a financial reward to offer. Equity crowdfunding is not helpful for businesses or causes that don’t expect a financial return. The best example of equity crowdfunding is real estate investment, as the primary goal is to invest in a venture that will provide a decent ROI. Make sure to catch the full explanation of equity crowdfunding from Mark and when to use it by listening to this informative episode!
Why it’s important to keep liability concerns in mind.
As you build your startup business, are their certain liability concerns that you should have in mind? Have you started exploring this critical facet of getting your crowdfunded business off of the ground? According to Mark, anytime you take other people’s money, you are exposing yourself to potential liability. Here is the crucial part, if you do everything right and comply with the law, you will not be on the hook if the investor’s money is lost. If you are starting your crowdfunding campaign, keep this in mind and make sure you are honest and transparent with the folks you are raising funds from!
[1:05] Mark Roderick joins the podcast.
[3:20] What the JOBS Act of 2012 created in regards to crowdfunding.
[6:30] How should a startup entrepreneur decide which regulation to raise funds under?
[9:00] The pros and cons of equity crowdfunding.
[12:00] Mark talks about the Investment Company Act of 1940.
[15:00] Which liability concerns should startup entrepreneurs have?
[20:00] How does the recent tax law reform impact the crowdfundin...