The Morning Ledger: Junk Bonds Send a Worrisome Signal - btbirkett@gmail.com - Gmail
Tech startup crowdfunding isn’t all it’s cracked up to be. An open secret exists around equity crowdfunding: As a mechanism for funding startups, it’s basically a nonstarter, Christopher Mims writes, and it’s also apparently deliberate. The SEC included rules that are a powerful disincentive for high-growth startups to use what the SEC calls “regulated crowdfunding.” The rules stipulate that any company that takes on more than 500 individual investors or ! grows to a size greater than $25 million in assets must start filing regular disclosures just like a publicly traded company. “It is all the pain of an IPO without the benefits of the IPO.”
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