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S&MC Insights - Crowd Funding


Individual Investment Grows Up & Institutional Investment Trickles Down


Most Economic Development Money Originates from Individuals

Savings - Stocks - Mutual Funds - IRAs - Pensions - City/County/State/Federal Taxes


The Growth in Value of Individual’s Crowd Funded Stock Investments

Becomes Liquid Cash to Fuel Consumer Spending

Creating Jobs & Prosperity


Stearns & More Capital Focuses more on the Crowd Funding of Economic Development

H.R. 2930 Crowdfunding

Congressman Patrick McHenry & David Drake - The Soho Loft Crowdfunding Conference

H.R. 2930 Crowdfunding

Jim White & David Drake - Monterey Bay Area Circle of Success TV

H.R. 2930 Crowdfunding

Stearns & More Capital and David Drake - Silicon Valley Forum

April 4 2011 VentureBeat

The Long Slow Death of the IPO: IPOs traditionally have been the pinnacle of success for companies, but Barry Silbert, founder and CEO of SecondMarket argues that’s no longer true. The IPO market, he tells students in this Entrepreneur Thought Leader Lecture at Stanford University, is dying a painful death. Silbert cites several reasons for this, ranging from Sarbanes-Oxley to the shift to online brokerages, which cut into the research budgets of brokers, who shifted their focus to large cap companies and began paying less attention to smaller ones.

November 4 2012 CrowdSourcing

On November 3 2011, the U.S. House of Representatives voted almost unanimously to pass Representative McHenry's (R-NC) H.R. 2930 bill, the "Entrepreneur Access to Capital Act".


If the bill becomes law, individuals could invest up to $10,000 in start-ups via the internet without first approaching the Securities and Exchange Commission. It would also represent a rare moment of bipartisan cooperation in a staunchly divided political climate.


Four of six proposed amendments to H.R. 2930 passed, including one by Representative McHenry that limits "the aggregate annual amount raised through the issue of the securities to $5,000,000 or less." Also, individual investments in securities are limited to an annual amount of $10,000 and no more than 10% of the investor's gross income.


A Trusted Endorser for an early stage company can range from an incubator, an accelerator, a university, current angels, etc.

March 20 2012 G Stearns

VOTE YES: HR 3606, the Jumpstarting Our Business Startups (JOBS) Act.


Dear Senators,


I am writing to ask you to:

Vote YES on the cloture vote on HR 3606, the Jumpstarting Our Business Startups (JOBS) Act.


Should that vote fail to get 60 votes, I urge you to Vote NO on the cloture vote on S.A. 1833 that would create over regulation resulting in less startup innovation in the US and less job growth in the US.


If crowd funding is to be given a fair chance it needs to be permitted to leverage new ways information is disseminated, to test whether average investors can be protected in a new, and perhaps better, way than the current paradigm.


I urge you to support Jumpstarting Our Business Startups (JOBS) Act.




G Stearns - Stearns & More Capital 2012.03.20


Sen. Dianne Feinstein CA Phone:(202) 224-3841 Fax:(202) 228-3954


Sen. Barbara Boxer CA Phone:(202) 224-3553 Fax:(202) 224-0454

April 04 2012 G Stearns

Thank You: HR 3606, the Jumpstarting Our Business Startups (JOBS) Act.


President Obama

The White House

1600 Pennsylvania Avenue NW

Washington, DC 20500


Comments: 202-456-1111 begin_of_the_skype_highlighting            202-456-1111      end_of_the_skype_highlighting

Switchboard: 202-456-1414 begin_of_the_skype_highlighting            202-456-1414      end_of_the_skype_highlighting


Dear Mr. President,


Thank you for working to pass and then signing the Jumpstart our Business Startups (JOBS) Act.


Now we will work to do our part. As I say re-interpreting JFK... Ask not what your government can do for you. Ask what you can do working with your government.


As I hope you do I value Vision Commitment Leadership, Peace & Prosperity for Everyone and Restoring the American Dream.


All The Best... G Stearns

Example Crowd Funding Portals: Kickstarter (USA)   IndieGoGo (Global)
Example Angel Funding Portals: FundersClub (Global)  CircleUp (Global)  Angel List (Global)
Example 2nd Market Portals: SecondMarket (Global)  SharesPost (Global)
Example Public Market Portals: NYSE (Global - New York Stock Exchange)
Example Public Market Portals:   NASDAQ (Global - National Assoc of Securities Dealers Automated Quotations)

Example Crowd Funding Regulators: US Security & Exchange Commission (SEC)


Example Crowd Funding Regulators: Financial Industry Regulatory Authority (FINRA)


Example Crowd Funding Regulators: Crowdfund Intermediary Regulatory Advocates (CFIRA)


Example Crowd Funding Regulators: Crowdfunding Professional Association (CfPA)


Successful Crowd Funder - Noel Murphy


Conducts - "Crowd Funding Boot Camp"

Crowd Funding Current Status


2012.11.21 David Drake - The Soho Loft

True Crowdfund SEC Timeline


Obama’s 10 Steps with SEC & FINRA to Legalize US Crowd Funding Equity


Crowd funding for equity won't be ready till Q4 2013 at the earliest and my guess is that implementation will be closer to Q1 2014. Let me walk you through my thinking around this.


SEC Chair Mary Schapiro will resign by year end. No proposal will be submitted until a new Chair is chosen. Granted that Mary was quickly chosen during the financial crisis and there was no lapse in time between Chairs, but Obama will pick a Democratic Chair to end the polarization that has not been endured at SEC Commissioner level for over 30 years. Yes, there have been factions and there certainly has been friction.  


Regardless, Obama also has a number of other matters in play during this period as he has to pick a Treasury Secretary, deal with the Fiscal Cliff and get inaugurated at the end of January.


So, here is my view of what’s got to happen before we see crowdfunding for equity implemented in the US. I’ll list the steps I regard as key interspersed with some thoughts on key implementation points.


Step 1.

The Announcement—at the earliest, a new SEC head will be announced in the last week of January, though the announcement could come as late as March.


Step 2.

Ratification—the Senate (which is controlled by Democrats), not the House (controlled by Republicans), will approve Obama's choice.


SEC Commissioner Elisse Walter was the interim Chair last time and is close to Mary Schapiro so she would be the interim Chair until a new Chair is confirmed.


Meanwhile the SEC staff has been surprisingly helpful and open in interactions with CFIRA (Crowd Fund Intermediary Regulatory Advocate), founded from the Crowd Funding Intermediary Regulatory Association, since we first sat down with them Friday April 20, 2012. They certainly have drafts they have been polishing the last six months and both Trading & Markets and the Division on Finance have been very accommodating as we have worked through all scenarios with them during more than several dozen meetings over the last 7 months.


Step 3. Say the new SEC Chair comes in Feb. 15 - he/she would need 30-45 days to review operations,

Step 4. and another 30 days to set up the proposal to be voted on by the SEC Commissioners, then we would be around May 1st.


Step 5. 90 days of public commenting would take us to August 1.


Step 6. It would take more days for the staff at the SEC to summarize all the proposals and circulate memos on suggestions to the Commissioners.


Step 7. After Labor Day the SEC Commissioners would set up a time to vote on the proposal as a final ruling. This puts us out to Oct. 1st.


Of course, these assumptions are based on past inner workings and results by the SEC and if we review the last 7 months the above will not meet any of our assumptions and deadlines. If Elisse Walter becomes the Chair, and not the interim leadership role, then we can see these dates being made as she is certainly ahead of the curve.


So, October 1st—give or take 15 days—is the best scenario for a ruling on crowd funding for equity.


Steps 8, 9, 10.

And then we are not finished. FINRA has been as quick as 30 days to implement SEC rulings but some have taken years.....


FINRA, the private police extension of SEC, will have to undergo its own process of proposals, commenting and rule making. That takes us into 2014 before we will see strong and swift progress.


The clock will start ticking when a new Chair of SEC starts work. Now we can only hope to keep all the balls rolling and all the conversations continuing with SEC and FINRA so there are fewer unknowns. Politics and new SEC leadership is pending and must take it's due course—CFIRA, SEC and FINRA are doing hard work and we in the industry have appreciated it. This current bottleneck is just a time of patience as our work continues.