'Crowd funding' being blocked by the SEC? We need access to capital...

**huttonpro** · 10-23-2011 12:00 PM

'Crowd funding' is probably the best way for a startup entrepreneur to raise capital. It's unfortunate that the SEC is blocking it. Is America still the place to be? Check out the article...

Breaking Economics: SEC Blocking 'Crowd Funding' Potential For Small Businesses

**jawzishere** · 10-25-2011 05:19 AM

Thanks for the article. Yes, sites like lendingclub.com allow for small businesses to raise a small amount of capital but if there was a resource that tailored to raised capital for businesses by selling ownership, that would be incredibly powerful.

**bizz** · 10-25-2011 09:50 PM

huttonpro, thanks for the breaking economics article. yes, raising capital for a start-up business can be very difficult. especially for beginners. what about creating our own fund? it could be something like a VC / credit union with about 20'000 youngentrepreneur members from different countries. imagine each one of us donating between 50$ - $100 that would be like $ 1'000'000 + every month. with this amount of money we could easily fund other entrepreneurs with great ideas who are struggling to raise capital or buy businesses and share the profit at the end of the each year. what do you think? if we are serious we can start this on our own. what do you think?

**daveb1** · 10-27-2011 06:22 PM

Im am not really sure if that article has that great of a point. There are lots and lots of ways to fund your business project and business through crowdsourcing without ever running into any SEC issues. Check out a site like:

Kiva.org

or

Innocentive.com

and there are 10 more just like them that greatly aid in starting a business or getting things done through crowd sourcing.

Another thing that is a little out of touch is that most good crowd sources do not need 500 people/shareholders (the SEC rule highlighted in the article) to get things done. In fact they probably do not even want to deal with 500 people if they truly are a small startup. Crowd sourcing is very powerful and there are many many places on the web where a startup can use there services without ever being in fear of dealing with the SEC. There are also lots and lots of methods to get funding for a startup so its not really the end of the world if crowdsourcing is ruled out as an option.

**DenverDave** · 11-01-2011 06:07 PM

I agree with daveb. there are many crowdfunding options out there that dont involve giving company shares to funders. just because you cant have more than 500 shareholders doesnt mean you cant have 10,000 donaters or 501 people recieveing small gifts for their donation. there are many ways to do it and I cant think of 1 startup that has 500 different investors anyways

**bizz** · 11-01-2011 06:40 PM

ofcourse it's possible for a startup to be funded by a large group of investors. crowdsourcing are mostly non profit organizations and that's ok. but why would you give away your money for free to businesses you know nothing about and are not going to fetch you profit, except for charitable purposes? that's the reason why there are so many crowdsourcing ventures out there because the entrepreneurs looking for capital are not aiming to do business for profit. that kind of business to me doesn't make sense, except again for charitable reasons. no wonder these kind of entrepreneurs can't get funds from anywhere else apart from crowdsourcing because a bank or a financial institution will grant you capital only if they'll get their money back. you can go through some threads here and find out that entrepreneurs with great ideas looking for capital are willing to share their profit with the investors and that's why i suggested we should start something like a credit union and fund businesses because there are many people here in need of start-up capital.