Today, FINRA proposed a rule change that could have the greatest impact on private markets in over 80 years. Known as the Funding Portal Rules, they would allow crowdfunding portals to take an active role in the sub $1 million non-accredited investor market currently untapped. These rules – when launched – would work in tandem with the as-of-yet enacted Title III JOBS Act rules to allow unaccredited investors to invest freely in private companies. The proposed changes can be read in their entirety here.
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If you’re new to EquityNet, or just not familiar with our popularity ranking, it’s essentially a five star rating system that’s designed to act as a gauge of investor interest in the businesses listed on the site. Since we launched it a few months ago, we’ve responded to a number of calls, emails, and even a few letters from entrepreneurs who want to know how it works, and what they can do to make theirs better. Today, we’re going to go over three of the most common questions those entrepreneurs have asked and explain exactly how it works.
In a first for donation-based crowdfunding, the creator of a Kickstarter campaign has been ordered by a state court to pay civil penalties, restitution, and court costs for failing to deliver products to his contributors. Edward J. Polchlopek, aka Ed Nash, and his company, Altius Management, have been ordered to pay a total of $54,851.29 for failure to deliver decks of ‘retro-horror themed’ playing cards.
On Tuesday U.S. District Judge Edward Chen granted class action status to suits filed by Uber drivers who claimed they were owed benefits from the company claiming they were treated as employees but paid like contractors. The original suit, O’Connor v. Uber Technologies involved only four drivers, Douglas O’Connor, Thomas Colopy, Matthew Manahan, and Elie Gurfinkel. They initially sued Uber for reimbursement for various expenses such as vehicle maintenance and fuel. This class action suit will allow them to prosecute this lawsuit against Uber on behalf of themselves and a putative class of approximately 160,000 other “UberBlack, UberX and UberSUV drivers who have driven for Uber in the state of California at any time since August 16, 2009.”
Earlier today, Burger King ran full-page ads in the New York Times and Chicago Tribune calling for a “ceasefire on these so called burger wars” by inviting McDonald’s to help them create the newest fast food monstrosity: the McWhopper. Ronald and McD’s CEO, Steve Easterbrook, weren’t exactly amused.
BK’s plan is to combine the two companies’ signature burgers – the Big Mac and Whopper – then sell it at a pop-up restaurant somewhere in Atlanta on September 21. Proceeds would benefit Peace One Day, a nonprofit that aims to make the date an “annual day of global unity, a day of intercultural cooperation on a scale that humanity has never known.”
Earlier this month whistleblowing platform, WikiLeaks, announced the launch of a new crowdfunding campaign to gain more information on the Transatlantic Trade and Investment Partnership (TTIP). The campaign, launched on August 11, is designed to raise funds to offer whistleblowers a reward for any information about the impending trade, which has been negotiated in almost complete secrecy despite its global implications. To date, the campaign has raised $86,693.47 from 2,441 people, 79 percent of the $109,700 goal.
Target – the slightly more upscale Wal-Mart – has agreed to pay thousands of Visa card issuers up to $67 million after their colossal December 2013 data breach that exposed around 40 million credit and debit cards. The settlement comes after the rejection of a proposed $19 million deal with MasterCard due to a lack of support from its issuers.
Nearly two years after the fact, no one is quite sure just how much the Target breach affected issuing banks. Trade groups working with various banks and credit unions have estimated costs of over $350 million to reissue cards and handle the financial muddle, but that number could actually be higher given the fact it costs small banks around $11 to reissue a card and roughly $20 per customer service call.
The nation’s largest privately held company, Cargill, has agreed to purchase Norwegian-based EWOS, one of the world’s largest suppliers of feed and nutrition for farmed fish. The $1.5 billion deal signals Cargill’s entry into salmon and trout markets and is the company’s second aquaculture deal in the past two months after it announced a $30 million shrimp feed facility project in Ecuador with Naturisa.
At this point, you can crowdfund just about anything. Campaigns to raise funds for medical bills, student loans, movies, new inventions, and startup capital have sprung up from all over the world, which led the crowdfunding industry to generate $16.2 billion globally last year in funding transactions. A new trend is emerging within the industry – platforms designed solely for litigation crowdfunding.
Platforms such as Invest4Justice, which became operational last year, have set out to provide both plaintiffs and defendants with legal funding from a crowd of investors or donors, asserting that those investors and donors can collect rewards that exceed 500 percent of the amount of funding provided. To date, the site claims to have raised $2,969,736.65 for 31 litigation crowdfunding campaigns.
Colorado is now the newest state to approve intrastate crowdfunding allowing the state’s residents to be able to purchase stock in local, private companies without becoming an accredited investor. At this point, 24 states have passed laws or rules allowing for intrastate equity crowdfunding.
Under the Colorado law, businesses can raise capital of up to $1 million with the potential to increase that to $2 million if they submit audited financial statements. Investments are limited to $5,000 per person, although other states have allowed up to $10,000. Generally, intrastate crowdfunding regulations limit investment size to ten around percent of a person’s annual salary. Accredited investors within the state have no limit to the amount they can invest.