February 3, 2014
February 3, 2014
Elizabeth M. Murphy
Securities and Exchange Commission,
100 F Street NE
Washington, DC 20549-1090
Re: File No. S7-09-13, "Crowdfunding"
Dear Ms. Murphy:
I am pleased to provide comments on the proposed SEC rule regarding Crowdfunding. We have been very active in this area.
On Thursday, November 21, 2013, the U.S. Black Chambers, Inc. (USBC) attended the Capital Formation Forum hosted by the U.S. Securities and Exchange Commission (SEC). The Forum focused on the Jumpstart Our Businesses Start Ups (JOBS) Act, a law that we believe promotes small business growth and access to startup funding by enabling micro and small businesses to raise capital through various website platforms known as Crowdfunding portals. The JOBS Act is also provides relaxed regulatory requirements (over traditional forms of financing) for individual investing in startups. There are seven Titles in the JOBS Act. Title III pertains to Crowdfunding and Title VII requires the SEC to reach out to women and minority businesses to alert them to the capital raising opportunities created by the Act.
Following the forum on November 21st, the U.S. Black Chambers, Inc. co-hosted a Focus Group on Thursday, December 18, 2013 with the SEC OMWI office. With several of our strategic partners, we discussed opportunities and challenges associated with the implementation and regulation of crowdfunding.
On Wednesday, January 15, 2014, USBC participated in the Small Business Crowdfunding Roundtable hosted by the Office of Advocacy at the U.S. Small Business Administration (SBA) to share recommendations to make the proposed crowdfunding rules more "user friendly" for the business community.
We applaud the SEC's decision to use their Office of Minority and Women Inclusion (OMWI) to ensure that diverse business communities are aware of the pertinent changes. The OMWI can play a vital role in shaping JOBS Act policies that will help our businesses grow. We look forward to working with the OMWI Office to educate our stakeholders and communities about the risks and rewards of this type of capital formation and how to leverage it optimally. Our Chief Economist, William Michael Cunningham, was recently featured in Black Enterprise Magazine highlighting the reasons that crowdfunding is a game changer for minority businesses. We refer the SEC to:
We believe the proposed Title III regulations are an important step forward, and will help democratize capital access for American small business, and for African American businesses specifically. For the first time since the implementation of the Small Business Act (SBA) of 1953, we are positioned to move far and fast in meeting the capital needs of the largest job creation source in our community. Correctly implemented, Title III will open the flow of capital to a sector of the business community that has been shut out for far too long.
We understand there are concerns about both the cost of required disclosures and the risk of the disclosure of personal information. The ability of businesses to gain cost effective access to much needed capital outweighs these factors. We believe the market will develop cost effective tools and techniques that fully address these matters.
The USBC applauds both the SEC and SBA for their outreach efforts to ensure that all communities are engaged in the rulemaking process.
US Black Chambers, Inc.