Equity Crowdfunding: Encouraging, Yet Sloppy chances are
A New Beginning
After awaiting an extended time period, the Regulation Crowdfunding was finally released by the U.S. Securities and Exchange Commission (SEC). The SEC also set May 16, 2016 as the state date to let websites provide the equity crowdfunding service. Since May 2016, several websites that received the approval for operation have entered the U.S. crowdfunding market.
Diversified Crowdfunding Services
An instant look of the U.S. crowdfunding market, one would discover that the market is sort of messy and very confusing. The players in the crowdfunding market include websites that have been offering diversified services. Those existing players include donation-based websites such as Kickstarter and Indiegogo, websites that have been approved by state legislation and regulators for intrastate equity crowdfunding, and websites offering services based on Regulation D and/or Regulation A, or to accredited investors only.
The new websites which can be supposed to provide the Title III, equity-based, or simply just equity crowdfunding service might have added more confusion to businesses and investors Wefunder. Those types of new websites, some of them have previously experienced crowdfunding business for many years and opened to accredited investors or accepted investment for Regulation D/A, etc.
As time passes, any website that wants to provide the Title III (or equity) crowdfunding would need to get approval from regulators. But, right now, either business owners or investors have to find out which website offers what type of crowdfunding service before using any one of them. Perhaps, which was among the reasons that crowdfunding websites including some with an incredible number of visitors have seen significant drop in traffic in recent months. Although no one knows what will happen in the U.S. crowdfunding market as time goes by, it is hopeful that the market will play it out by itself. With the Regulation Crowdfunding in place, the U.S. crowdfunding market will grow and expand to a healthier market.
In certain other countries, crowdfunding was launched without proper regulations in place. Industry was quickly turned to be sour for businesses and investors. Although most crowdfunding websites because country are honest players, the bad standing of the whole industry pushes most players to either move out the market entirely or conduct crowdfunding business under an address of other businesses. One of many key questions for the U.S. crowdfunding market is whether "crowd" will support and purchase firms that are seeking funding on websites. At today's time, no you have an answer yet.