Category Archives: Crowdfunding

Marketplace 2.0

Online marketplace lending platforms are offering compelling new ways for consumers and businesses to obtain loans. Driven by innovations in financial technology (FinTech) that have created dramatic efficiencies, these platforms have changed the face of financial services. According to a KPMG report, the U.S. online alternative finance industry originated $36.4 billion in loans in 2015, up from $11.6 billion in 2014. This segment of the finance industry has obviously been expanding rapidly and we anticipate this expansion will continue. Just as FinTech has created new online lending models, crowdfunding has created new models for equity investing, donations, and rewards. A …

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Crowdfunding 101

The concept of “crowdfunding” offers a new option to startups and small businesses for raising capital, although it is a greatly misunderstood and misused term. It refers to the pooling of money from a crowd for the funding of a project or venture, whether utilizing a donation model, reward model, royalty model, debt model or equity model. Securities laws apply when equity or debt securities are offered. Title III of the JOBS Act added a new Section 4(a)(6) to the Securities Act, which provides an exemption from the registration of such securities provided the issuer complies with certain rules and …

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