May 30, 2012
50% + of startup companies today, especially those in the high tech sector, are started by people under the age of 30 these are people who have a vision and are highly educated and competent technically, but may not be good in preparing documents and disclosures. Many of these start ups need a seed of $100K or less to turn their idea into a product and a product into a business. If these companies are to comply with the requirements being considered presently, they will never get off the ground.
The concerns expressed and the requirements being considered for CrowdFunding projects that exceed $500,000 especially when exceeding $1,000,000 are reasonable.
However, do recognize that for $100,000 of seed funds requirements that necessitate time and money for the entrepreneur to qualify their project will result in reducing the number of NEW BUSINESSES being started by CrowdFunding by more than 80%.
If a lot of requirements are also placed on the CrowdFunding sites that accept less than $100K projects, you'll be forcing them to recoup their costs by charging more in fees and extra services. Successful business start-up that get off the ground with the initial $50-$100K will undoubtedly come back to the same CrowdFunding site to do another round for a larger amount to expand the business, and at that time they can afford to meet the requirements that would have been too elaborate for them at the start.
CrowdFuning will either be the engine that will pull the U.S. economy out of the anemic condition its in or it will be a total waste of time and resources all will depend on the rules you will come up with in the next few months.