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It has only been nine months since the SEC’s amendments to the Securities Act took effect with a goal to “facilitate capital formation and increase opportunities for investors by expanding access to capital…” These amendments upgraded Regulation Crowdfunding by: (a) increasing the maximum amount that can be raised annually to $5 million (up from about $1 million), (b) allowing investment through SPVs for cleaner cap tables, (c) removing the cap on investment for accredited investors and (d) changing the investment limits for other investors.

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Not only do we expect to see more companies include a crowdfunding offering as a piece of their fundraising pie, but we also foresee that innovative uses of crowdfunding could further disrupt the status quo of venture capital. In “Crowdfunding the Venture Capital Firm: How the SEC’s Expansion of Equity Crowdfunding Could Redefine Venture Capital Fundraising,” published in the ABA Preferred Returns Newsletter, Fall 2021, <a href="https://www.thompsonhine.com/professionals/lumpkin-layla" target="_self" rel="noopener">Layla Dotson Lumpkin</a> and <a href="https://www.thompsonhine.com/professionals/bean-daya" target="_self" rel="noopener">M. Daya Bean</a> from our <a href="https://www.thompsonhine.com/services/new-ventures" target="_self" rel="noopener">New Ventures</a> practice group discuss the evolution of crowdfunding regulation and examine an example of a novel application of the crowdfunding model – using crowdfunding to fund the operations of a venture capital fund general partner.

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<a href="https://www.thompsonhine.com/uploads/1490/doc/Preferred-Returns_ABA_Fall-2021-Crowdfunding_Lumpkin_Bean_4877-7736-0386_v.1.pdf" target="_blank" rel="noreferrer noopener">Read full article here.</a>

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<a href="https://www.thompsonhine.com/professionals/lumpkin-layla" target="_self" rel="noopener">Layla Dotson Lumpkin</a>&nbsp;or&nbsp;<a href="https://www.thompsonhine.com/professionals/bean-daya" target="_self" rel="noopener">M. Daya Bean</a>

or visit our <a href="https://www.thquicklaunch.com/" target="_blank" rel="noreferrer noopener">QuickLaunch</a> site for startups and investors.

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Layla Dotson Lumpkin

New Ventures

Crowdfunding Continues Changing the “Rules” of Venture Capital