It's Not Crowdfunding!

Since the Regulation A+ effective date last month, a number of websites have emerged that promote "Regulation A+ crowdfunding" contributing even further to the confusion in the market regarding "crowdfunding."

Colloquially perhaps any attempt to raise capital through the use of an internet-based platform may be thought of as crowdfunding; however, to a securities lawyer, this usage of the term "crowdfunding" may be misleading.

Title III of the JOBS Act establishes a securities offering exemption for "crowdfunding" (some refer to this as Title III crowdfunding or refer to the new exemption, Section 4(a)(6)), which is available only to certain issuers, and only to raise up to a specified amount of proceeds ($1 million in a twelve-month period).  A Title III crowdfunded offering must be made through a registered broker-dealer or a funding portal.  The SEC has proposed rules for Title III crowdfunding that, among other things, limit advertising and marketing of such