2. Panelists
October, 2015 || Tweet: @patchofland || Facebook: /crowdfundrealestate
Amy Wan
Principal
Law Office of
Amy Wan
Scott Darden
CTO
Crowdfunder
Robert Kang
Chair
IAPP
Knowledgenet
Lew Feldman
Founder
Heritage
Ventures
4. Trends in Crowdfunding
4
$89 $115 $166
$866
$1,170
$2,123
$840
$1,362
$2,770
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
2011 2012 2013
Crowdfunding Growth by Type
($ in Millions)
Equity Debt Donation & Reward
5. 4 Types of Crowdfunding
Donation Reward
Equity Lending
5
6. April 2012: Obama
signs The JOBS Act
Into Law
September 2013: SEC
implements Title II of
the JOBS Act (Reg D)
June 2015: SEC
implements Title IV Of
the JOBS Act (Reg A+)
May 2016: SEC
implements Title III of
the JOBS Act (Reg CF)
Timelines
7. Type
Reg D, Rule
506(b)
Reg D, Rule
506(c)
Reg A + Reg CF
Intrastate
Exemption
Pros
• Self-
certification
for accredited
investor
status
• Immediately
available
• Federal
preemption
• No cap
• General
solicitation
• Immediately
available
• Federal
preemption
• No cap on
amount raised
• General
solicitation
• Crowd can
participate
(but there are
investment
limitations)
• Portals must
be registered
as BD or
funding portal
• Crowd can
participate
(with
investment
limitations)
• No federal
limitations on
amount,
investor
status, or
manner of
offering
Cons
• No general
solicitation or
advertisemen
t
• Must take
reasonable
steps to verify
accredited
status
• Cap on
amount of
total money
raised at
$50M
• A mini-IPO
• No state
preemption for
Tier I offerings
• Issuer Limited
to 1M offering
per year
• High
transaction
cost given
limitation on
offering
amount
• Must be
issued only in
one state by
entity in that
state
• State specific
laws still
apply
Regulations
click here for crowdfunding cheat sheet
8. • No maximum amount
• Limited to accredited investors only
• Difference between 506(b) and 506(c)
– 506(b): “pre-existing substantial relationship”
– 506(c): “reasonable steps to verify”
• Principles-based method v. safe harbor methods
• Low cost, typically sold via portals
Regulation D
9. Regulation A+
• Limited to $50M each 12 months
• Anyone can invest, subject to some limitations
• Difference between Tier I and Tier II
– Tier I: $20M limit, no ongoing reporting
– Tier II: $50M limit, substantial ongoing reporting akin
to mini-IPO
• Submission must be approved by SEC, and for
Tier I filings, by states as well
• States have filed lawsuits re: preemption
• Applicable examples: Groundfloor, Fundrise
10. Regulation CF
• Effective May 16, 2016
• Limited to $1M each 12 months, including
affiliates
• Portals must be registered as either broker
dealers or funding portals
11. Recent Events
• SEC v. Eureeca (Accreditation enforcement case)
• FTC v. Chevalier (Kickstarter Fraud case)
• Treasury Department RFI on Marketplace
Lenders
• SEC additional guidance
• Madden v. Midland case