U.S.’s Equity Crowdfunding and the JOBS Act 2.0
Welcome to the Crack The Crowd Podcast!
In this episode we sit down for part two of our interview with Dr. Richard Swart to discuss the United States regulatory environment and its impact on crowd funding and innovation. Swart highlights Galvin’s Case vs. the SEC, relatively flat growth of Title II, accredited investor’s friction to invest, and the surprising activity in real estate. He lays out a case for what should and could be done to stimulate more economic and crowd funding growth, in the JOBS Act 2.0 by congress person McHenry, and the need for action by legislators in the very near future to attain those goals.
More: Richard Swart is Crowdfunding and Alternative Finance Researcher and Scholar-in-Residence in the Institute for Business and Social Impact at the University of California, Berkeley, researching crowdfunding, crowdsourcing and alternative finance. Swart organizes the Annual Academic Symposium in Crowdfunding Research, which is globally recognized as the leading event in crowdfunding research and policy, which has brought eminent faculty, government officials and policy makers from over 30 nations to UC Berkeley.
Recognized as one of the top thought leaders in crowdfunding and alternative finance, with particular interest in its impact on social innovation and global challenges. He has been the subject in leading business publications including Forbes, Inc, Entrepreneur, VentureBeat, Wall Street Journal, New York Times, BBC, PBS, MSNBC, NPR, Financial Times, Washington Post and dozens of others. Coauthor of the forthcoming book Crowdfunding: the Corporate Era, discussing how corporations leverage crowdfunding as an essential tool for driving innovative ways to strengthen their brand experience, deepen their impact in the community and improve sales.
Swart has a strong interest in the international expansion of crowdfunding. As such, he was the lead author of a major research paper for the World Bank on the potential impact of crowdfunding around the globe. Board member or strategic advisor to several firms, mostly in crowdfunding, fintech, and social entrepreneurship.
For the longer, main audio discussion, you can:
Selected Links People and Organizations Mentioned in this Episode From This Episode
- Ethan Mollick
- William Galvin
- JOBS Act
- Carlton Group
- National Economics Council
- Verify Investor
- Patch of Land
- Dynasty Wealth
- Representative McHenry
[2:20] N.A.S.A.A. admits unintentionally overstating the risk profile of crowdfunding
[3:00] The US and the backstory of Galvin vs. the SEC Massachusetts sues to block Title IV claiming SEC overreach in pre-empting states rights to review filings
[8:20] The backstory on Reg A+ as alternative public offerings and the IPO comparison 20+ years ago
[9:30] Less IPO leads to less transparency and less openness, and companies beholden to private equity, lost innovation and lost jobs
[15:00] Nobody saw real estate coming is 70%-80% of all Title II filings
[36:30] there’s a lot of data that suggests small caps are much better than larger cap investments dynasty wealth is one such company aiming to spot these so-called unicorn companies
[38:10] Equity crowdfunding will makes sense in 10 years.
[39:20] Make it easier on platforms to curate and control experience. Let them portals put some skin in the game, I’d like them taking warrants. Warrants would incentivize platforms to be more creative, but only get paid if the equity performs.
[40:00] We are not going to have 100 equity platforms that are successful.
[40:30] if you are expecting your breakeven point to be in the next three months, you are in the wrong business.
[41:00] in many ways this is analogous to social media …we are going to see a lot of early platforms destroyed
[41:30] Title III is dead on arrival the White House knows that, Congress knows that, the SEC knows that, off the record most people will admit it.
#CRACKtheCROWD is a long-form conversation about the dynamics and people in crowdfunding hosted by Entrepreneur, Strategic Advisor, and Innovation Strategist Dan Baird.