Worldwide and Domestic Crowdfunding Updates
When you work in an industry as innovative and emergent as crowdfunding, exciting news and updates seem to occur every day. More and more countries are beginning to realize the power of crowdfunding and the activity of intrastate crowdfunding in the United States is amazing. The seemingly around-the-clock growth of U.S. equity crowdfunding and around the globe is a true testament of its power, effectiveness and staying power in 2015 and far into the future.
After researching the industry we found several stories worth sharing with our news-hungry audience. It is always exciting to find updates you can’t wait to share and today we have five pieces of global and U.S. crowdfunding news for you to digest.
Crowdfunding in Africa
Although crowdfunding and equity crowdfunding are quite well-known worldwide, Africa is one of the last continents to utilize its capabilities. That is, they were until the World Bank launched a program to help Kenyan business owners benefit from crowdfunding as well. A recent crowdfunding report on Africa shared news that World Bank’s Kenya Climate innovation center is also offering crowdfunding mentorship programs for small companies. The programs will help small companies learn how crowdfunding works, how to create an effective campaign and much more.
Three businesses have already launched campaigns, including Wanda Organic, an organic fertilizer business. Wanda Organic founder Marion Moon says she had a hard time financing her business before and believes the crowdfunding concept is not new to Africans:
“I think the word ‘crowdfunding’ is new to people. But the idea or the principle of everybody putting in a little bit to help a project, I do not think that is new at all. So I think one of the things we maybe could have done better is how we linked what people are used to, to this word ‘crowdfunding.’”
Crowdfunding in Thailand
Great crowdfunding news out of Thailand! As of Wednesday, February 11th, the Securities and Exchange Commission (SEC) of Thailand reported they are finalizing the country’s crowdfunding rules which could be released in 2015. The move would allow SME’s to raise funds via crowdfunding portals and create a major shift in how Thailand-based companies raise funds from the equity market.
Thailand was recently the host of the Crowdfunding Asia Thailand Summit 2015. The event was held at the Renaissance Bangkok Ratchaprasong Hotel in the capital city of Bangkok and was fully booked when it took place February 10-11. The next Crowdfunding Asia event will be held in Indonesia on April 15-16th.
Crowdfunding in Malaysia
The Securities Commission Malaysia (SC) just released the Guidelines on Regulation of Markets under Section 34 of the Capital Markets and Services Act 2007 and shared new requirements for equity crowdfunding in Malaysia. The requirements cover the registration of equity crowdfunding platforms and details pertaining to the operators of equity crowdfunding platforms. The Guidelines ask for the operator’s Board of Directors to be organized and professional, the operator to ensure confidence in the efficiency and security of the platform and much more.
Details of the Malaysia’s equity crowdfunding rules are somewhat similar to those in the United States. Issuers can raise up to 3 million MYR in a 12-month period and non-sophisticated investors can invest up to 5,000 MYR in one company and a total of 50,000 MYR per 12-months. The original public response consultation paper was released on August 21, 2014 and the SC then released its September 25th, 2014 with its revisions to the proposed framework.
U.S. Intrastate Crowdfunding News – Mississippi
In late 2014, Mississippi Secretary of State Delbert Hosemann organized a crowdfunding study group to assess the potential of the capital-raising engine in The Magnolia State. The appointed group must have gathered favorable evidence because on Friday, February 13th, Secretary Hosemann announced that Mississippi will be the next state to legalize intrastate equity crowdfunding. Hosemann was optimistic about the possibilities and cited the long delay of the SEC as one of the state’s motivations to move forward.
As one of the highest investor limits in current intrastate crowdfunding rules, Mississippi investors can pledge up to $50,000 per year. Mississippi companies will also not have to pay the state any fees to participate. Here is Secretary Hosemann on his excitement for Mississippi crowdfunding:
“Crowdfunding is proven way to raise funds to start or expand a small business through the internet, typically through small individual contributions from a large number of investors. Mississippi is once again leading the way to encourage small business development, growth for economic development, and create jobs for Mississippians.”
U.S. Intrastate Crowdfunding News – North Carolina
Although internal politics suspended any hope of intrastate crowdfunding last year, new legislation has recently been submitted to the North Carolina General Assembly. The first piece, House Bill 63, is titled “The North Carolina Intrastate Private Capital Act” and is supported by Representatives Chris Millis (Pender County) and Jeff Collins (Edgecombe County). The second is House Bill 14 and is titled “The Jump Start Our Business Start-Ups Act and to Enact the New Markets Jobs Act of 2015″.
The bills ask for state government to extend the Rule 147 intrastate exemption to all North Carolina businesses and investors. Thomas Vass, an advocate of House Bill 14, offered this statement on the crowdfunding bills introduced in North Carolina:
“The major political hangup on crowdfunding at the SEC is dealing with the issue of protecting non-accredited investors from charlatans and hucksters. I do not think the SEC is ever going to act on this issue. Our private North Carolina companies, especially small manufacturing firms, need growth capital, and we can take control of our own economic destiny and move forward to fill this gap with the proposed legislation by Representative Millis.”
It is very exciting to see global crowdfunding and intrastate crowdfunding expanding at such a fast and successful rate. It is obvious that many countries understand the benefits but may need a little more time to introduce the concept and teach companies and investors how crowdfunding works. Here in the U.S., it is the same ol’ story of states getting fed up with the SEC and taking matters into their own hands. Intrastate crowdfunding allows each state to draft their own laws, so in the end, it may be better than all 50 states following one set of rules by the SEC. We will definitely keep you updated on everything that happen next!
Thank you for reading and please leave your questions and comments below!