JOBS ACT Unintended Consequences: Already-Public Companies Reaching Out For More Cash

Posted on by admin

Brokerdealer.com blog update courtesy of extracts from the WSJ story “Rules Eased For StartUps Benefit Older Companies”

But another breed of company is angling to benefit from the Jumpstart Our Business Startups Act: freely traded firms, a few of which have been operating for a long time.

Salon Media Group Inc., SLNM -21.05% a 19-year old financially fighting Internet media business, and Giggles N Hugs Inc., GIGL 21.28% a seven-year old food-and-play-space chain, are among dozens of publicly traded companies that have signaled they intend to solicit investors using the new independence in the JOBS Act. Both trade on the over-the-counter market, and auditors have raised worries about their capability to continue operations.

The businesses are seeking new investors using some of the JOBS Act that lets small-scale private businesses advertise to affluent people, known as “accredited investors,” changing an 80-year old “general solicitation” marketing prohibition designed to safeguard investors.

The companies’ use of advertising independence meant for young start-ups exemplifies how a surprisingly extensive array of players expect to obtain an advantage under the brand new law. “You can place it in the class of unintended effects,” says New York securities attorney Douglas Ellenoff, referring to using the JOBS Act by publicly traded firms. “The entire purpose” of the law “was to allow it to be simpler for private companies to raise money,” he adds. Continue reading →

Accredited Investor Rule Subject To Change Thanks to Crowdfunding and JOBS Act

Posted on by admin

Brokerdealer.com blog update courtesy of extract from FINalternatives.com

FINALTERNATIVESThe Securities and Exchange Commission is considering changes to its 30-year-old definition of “accredited investor” that could have serious implications for the crowdfunding industry.

Accredited investors are permitted to participate in private securities placements, and since the passage of the JOBS Act in 2012 opened the door to general solicitation for investors, many have been finding those opportunities through crowdfunding platforms.

The current definition of an accredited investor, written in 1982, says it is a person with earned income in excess of $200,000 (or $300,000 with a spouse) in each of the prior two years or one with a net worth over $1 million (alone or with a spouse), excluding the value of his/her primary residence.

Those pushing for change say the income thresholds have not been updated for inflation—that in today’s dollars, $200,000 and $300,000 would be $500,000 and $700,000.

But critics, like Brendan Ross, president of Direct Lending Investments, say such a change would halve the number of accredited households in the U.S., which today make up, by the SEC’s own calculations, 7.4% of all households.

Ross, who manages a short-term, high-yield small business loan fund, told FINalternatives that as regulators “become more educated on the implications of such a change, they will be less likely to move forward.”

“This would negatively impact the investment management industry as the number of accredited investors would sharply decrease. It’s unlikely that the SEC would want to impinge upon the private placement industry, which is the source of most financial innovation. Value investing, small companies, emerging markets, commodity funds, and REITs all started with accredited investors putting money into private placement vehicles, which then evolved into mutual funds.”

 

For the full story, please visit www.finalternatives.com

BrokerDealer.com Launches Business Intelligence Portal For Bankers, Investors and Entrepreneurs Raising Capital

Posted on by admin

Immediate News Release

BrokerDealer.com Launches Broker-Dealer Business Intelligence Portal for Global Bankers,

Qualified Investors and Entrepreneurs Raising Capital

New York, NY—May 28–Broker Dealer LLC, a provider of financial industry corporate intelligence and qualified investor databases, announced today the launch of a new, broker dealer web-based portal that incorporates 100,000 broker dealer, investment banker and securities dealer profiles as well as upwards of 20,000 qualified investors extending across 35 major countries, including capital formation brokers and deal investors based in North America, EU, Eastern Europe, China, Pacific Rim, the Middle East and Africa.

Apart from detailed lead generation and decision-maker metadata, the company’s platform incorporates a range of social media applications, including a “deal room” forum that enable capital-seeking business enterprises to share their business plans with professional deal-sourcing bankers and private funding sources that include qualified angel investors, hedge fund managers, private equity and venture capital firms and family offices seeking investment opportunities. The firm’s investor database is available for free and is accessible via http://BrokerDealer.com.

“Brokerdealer.com could be the right domain for this new player in the business intelligence space when considering the evolution of the JOBS Act in the U.S., the global embracement of crowd-funding in advance of traditional investment bank capital-raising techniques and the depth of global contact information available within the brokerdealer.com database. The social networking function within its subscriber-based platform is compelling, and it’s advertising-free.”

Brokerdealer.com was designed to help connect companies seeking broker dealers, funding, underwriting, or lead manager assistance for debt and equity offerings. The platform was created out of the need to give entrepreneurs, investors and data providers the ability to connect with one another. The broker dealer databases found on brokerdealer.com includes information such as broker dealer’s name, address, phone, URL/emails, and most important, a description of what the broker-dealer actually performs. If a company is seeking to raise capital for a real estate project the user will be able to filter the broker dealer databases – on a global scale – and reach out.

Brokerdealer.com anticipates adding 45 additional securities dealer and broker directories, giving network members of brokerdealer.com upwards of 75 of the world’s most popular broker dealer lists.

For Additional Info:

Email: [email protected]

Twitter: @broker_dealer

Crowdfunding Site “Fundrise” Raises 1st Round of Financing; Chinese Real Estate Moguls Join Tech Execs In Venture

Posted on by admin

Brokerdealer.com provides below extract courtesy ofdealbook_post NY Times and reporter Amy Cortese.

CROWDFUND-articleInline-v2

Fundrise co-founders Daniel Miller (l) and David Miller. Photo courtesy of Vannessa Vick for the NY Times

Fundrise, a website that aims to draw in a broad range of investors to finance commercial real estate deals, has raised more than $31 million in its first round of funding from a group of prominent technology, real estate and other backers.

Fundrise, based in Washington, is a pioneer in real estate crowdfunding, allowing individuals to directly invest with as little as $100 in hotels, apartment buildings and other development projects. Until recently, even small-scale real estate projects typically had been the exclusive domain of wealthy investors and private equity firms.

The company was founded by two brothers, Benjamin and Daniel Miller, in August 2012, shortly after the JOBS Act legalized crowdfunding, although they began working on the concept as early as 2010.

The financing round was led by Renren, a large social networking company based in China. It is also being backed by several real estate firms and individuals including executives of Silverstein Properties, the owner and developer of the World Trade Center; Rising Realty Partners, a Los Angeles developer; the Ackman-Ziff Real Estate Group; Scott Plank, a real estate developer and former Under Armour executive; and Richard Boyle, former chief of Loopnet, an online commercial real estate listing service. The Collaborative Fund, an investment fund, also participated in the round.

For the full story from the New York Times DealBook, please click here.

Crowdfunding: New Asset Class, New Investor Class

Posted on by admin

tabb forum logoBrokerdealer.com credits TABB Forum and submission from Kim Wales/Wales Capital with below

Crowdfunding is on the rise in today’s re-regulated and democratized global capital markets, and the JOBS Act is proving to be a game-changer for institutional investors.

After the Lehman Brothers’ bankruptcy left the market reeling, some questioned how a single U.S. investment bank could cause global pandemonium. Today, a change of course is underway. The economic turmoil since 2007 has provided a catalyst for change. As a new guard is called into order to rein in provincial finance, the old guard is preparing for life under the regime of the Jump Start Our Business Start Ups Act (JOBS Act). Crowdfunding – a new asset class and a new investor class – is on the rise in this re-regulated and democratized global capital market.

Many private funds have not yet embraced what is slated to become the game-changer and the most innovative reality for 21st Century Finance for generations to come. The millennial generation (ages 18 to 37), which makes up 86 million individuals and is larger than the baby boom generation, is at the forefront of a new economic movement that believes that it is important to grapple with issues such as inequality and its economic consequences.

For the full article, please visit TABB Forum