Crowd Valley has observed over the past two years a growing interest from traditional finance personnel, such as fund managers and investment advisers, towards P2P marketplaces. This trend has also been observed by finance journalists who recently reported that Wall Street is seeing an increase of investment of P2P debt by fund managers. |
After Michigan, New Mexico and eleven other States, Texas joins the Intrastate Crowdfunding Movement, becoming the largest US state adopting a set of rules for equity crowdfunding (California’s law for intrastate crowdfunding got stuck in the State’s senate). Last Wednesday, the Texas State Securities Board approved a law that allows adults resident in Texas to buy shares of private companies through crowdfunding portals. Like in all the other States which joined the Intrastate Crowdfunding Movement, also in Texas the law limits the possibility to use crowdfunding to raise equity capital only to companies incorporated in the State. One year has passed since the SEC released Title II, which removed the ban on general solicitation and general advertising for private issuers. Since then the entire US crowdfunding sector has been waiting the famous Title III, which would eventually allow also non accredited investors to invest through equity crowdfunding portals. Nevertheless, even though Title III is still missing, the US market of equity crowdfunding has been flourishing with interesting numbers. In the last couple of years , while waiting for Title III to be eventually released by the SEC, several US states adopted intrastate crowdfunding laws, which allow companies to raise capital through local securities crowdfunding portals. Among them there is Michigan, whose securities crowdfunding exemption allows resident issuers to offer securities only to local investors, like it also happens in other states. California and New York have dominated the entrepreneurial and crowdfunding race in the States, but almost out of nowhere, the southern state of Kentucky, who was ranked second to last in the entrepreneur ranking in 2008, is now in fourth place according to the State Entrpreneurship Index (SEI). An outstanding and promising achievement for the small state. Recent reports from the state indicate that more Kentuckians have started their own business, and the number only appears to be growing. Last week it was announced that London is the world’s crowdfunding capital, based on some recent statistics published by a crowdfunding research institute, which showed that the British capital was the city with the highest number of crowdfunding campaigns launched per day. The announcement comes as little surprise, considering that the incredible growth of crowdfunding in the UK was already in the air. A very open mindset with regards to innovation and technology, on the one hand, and a prompt answer from the local authorities - that reacted to the growing phenomenon putting in place a regulation -, on the other hand, allowed British crowdfunding to flourish at very fast pace. In the US, an “accreditated investor” is defined as the individual who 1) had High Net Worthearned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years AND reasonably expects the same for the current year; OR 2) has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person’s primary residence). These criteria have not changed much since the 80’s and they currently allow about 7% of the US population to be qualified as such. However, the SEC is considering to modify the definition, potentially making more stringent the requirements, which could severely hinder US early stage finance market. |
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