Skip to main content

SEC to veterans, women and minorities: Fahgettaboudit!

I attended the Government-Business Forum on Small Business Capital Formation held at the US Securities and Exchange Commission on November 19th. 
According to the SEC, one of the Forum's goals "is to .. highlight perceived unnecessary impediments to small business capital formation and address whether they can be eliminated or reduced. Each forum seeks to develop recommendations for government and private action to improve the environment for small business capital formation, consistent with other public policy goals, including investor protection. Participants in the Forum typically have included small business executives, venture capitalists, government officials, trade association representatives, lawyers, accountants, academics and small business advocates..the format of the Forum typically has emphasized small interactive breakout groups developing recommendations for governmental action." 
Let me just say that the Forum was a confirmation of some of my earlier statements about the SEC.
Participants at the sessions I attended consisted mainly of lawyers, with the occasional right wing lobbying group (Heritage Foundation) thrown in to make sure the interests of low and middle income citizens went unrepresented.
I am not exaggerating. At one point in a breakout session to develop recommendations concerning crowdfunding under Title III and Title IV of theJobs Act, a collection of lawyers forwarded a proposal to let foreigners use crowdfunding in support of EB-5 visas. The EB-5 visa "provides a method of obtaining a green card for foreign nationals who invest money in the United States."
While I have nothing against foreigners who want to invest in the US, during the session I noted that Title VII of the JOBS Act seeks to provide opportunities for veterans, women and minorities, and that the SEC may want to consider this first, since it is, you know, the law.  Title VII says "The Securities and Exchange Commission shall provide online information and conduct outreach to inform small and medium sized businesses, women owned businesses, veteran owned businesses, and minority owned businesses of the changes made by this Act." 
The JOBS Act actually restricts foreign use of domestic crowdfunding, a good thing in that it lowers fraud and gives native US Citizens a chance to benefit from American crowdfunding first.
Unfortunately, the lawyers in the room were having none of it. Aided by a feckless SEC staff person and a moderator who was himself a lawyer (not a small business person) proposals to reinforce the SEC's commitment to veterans, women and minorities were voted down, in favor of a recommendation giving foreigners the right to use domestic JOBS Act crowdfunding in support of the EB-5 visa program. 
You just can't make this stuff up.

Comments

Popular posts from this blog

Crowdfunding heads to Georgetown

So first Fundrise raises $31Million for real estate crowdfunding.  Now Realty Mogul, a real estate crowdfunding platform, responds quickly with a rare opportunity to be a part of a $31.8 million project in the exclusive Georgetown neighborhood of Washington DC. #crowdfundrealestate Realty Mogul, along with   JOSS Realty Partners ( "JOSS" ) , is introducing the Georgetown Plaza to the crowdfunding world. This 150,097 square foot   Class B office building is  located on Wisconsin Avenue, Washington DC's major north-south artery and half a mile north of Georgetown University's main campus and Georgetown University Hospital. The primary objective of this investment crowdfunding campaign is to acquire, lease-up, and reposition the office building before reselling. In this crowdfunding transaction, Realty Mogul investors will hold a partnership equity stake in Realty Mogul 19, LLC.   Realty Mogul 19, LLC will subsequently invest in 2233 Wisconsin NY Member L

Crowdfunding Accounting 101 - Revenue Recognition in Crowdfunding

A start-up using crowd funding to create a product is different from a normal company. The start-up has cash inflows from donations but does not have a product, yet. In this situation, we recommend using completed-contract method to recognize revenue. Under this way of thinking, we assume the start-up is akin to a project or a long-term contract. The crowdfunding company will find it difficult to estimate the revenue from crowdfunders and, hence, the cost of rewards or perks. Under International Financial Reporting Standards (IFRS) and GAAP guidelines, if the firm cannot reliably measure the outcome of the project, revenue should be recognized based on contract costs. These costs should be expensed when incurred. Profit is recognized only at the completion of the project. In summary, for crowdfunding companies, revenue, expense, and profit are recognized only when the crowdfunded product is actually manufactured. 1 For example, assume that AAA Corp. wants to manufacture bicyc

Why we are so optimistic about crowdfunding for minorities

Dr. Mark Dean - On the IBM team that developed PC : "Mark E. Dean (born March 2, 1957) is an African American inventor and a computer engineer. He led the team that developed the ISA bus, and he led the design team responsible for creating the first one-gigahertz computer processor chip. Dean has also helped in the early development of the computer keyboard. He holds three of IBM's original nine PC patents." Jesse Russell , recognized father of digital cellular technology: "Jesse Eugene Russell (b April 26, 1948) is an African-American inventor and one of the visionaries’ whose innovative perspectives profoundly influenced the wireless communications industry, (a) driver of growth in the 21st century. Trained as an electrical engineer at Tennessee State University and Stanford University , and recognized globally as a thought-leader, technology expert and inventor in the field of wireless communication for over 20 years.." Emmitt McHenry , Founder of Ne