Newspaper article THE JOURNAL RECORD

Venture Capital Companies Don't Flock to Crowdfunding Rules

Newspaper article THE JOURNAL RECORD

Venture Capital Companies Don't Flock to Crowdfunding Rules

Article excerpt

OKLAHOMA CITY - An upcoming Securities Exchange Commission rule about equity crowdfunding doesn't interest some Oklahoma venture capital agencies.

"We tried crowdfunding a couple of years ago without much success, so I don't think it will be part of our strategy going forward," said Cameron Mackie, vice president at Emergent Technologies LP.

The Jumpstart Our Business Startups Act, signed into law three years ago, was intended to open doors for small businesses seeking development capital. Current rules require individual business investors to be accredited, which means an income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000. And net-worth criteria include a minimum net worth of at least $1 million.

Title III of the law - once the SEC finalizes the rules - is expected to democratize funding via crowdfunding, allowing businesses to raise up to $1 million directly from the public.

Scott Meacham, chief executive and president of i2E Inc., said he's keeping an open mind until the rules are issued. He said he's seen it work well for startup retailers.

"There's a place for it in crowdfunding," he said. "But the problem is that, typically, a startup doesn't want a whole lot of owners. And they tend to want more strategic investors - people who can help them develop their business or provide professional contacts to larger investors at later stages."

"It kind of makes more sense for a company that's advanced a little farther to a larger financing round, to make it a little less risky and a little more manageable," he said. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.