I Would Still Pass On Crowd Funding

Several weeks ago, we explained that the SEC's proposed crowd funding rules may make financing your start-up via websites like Kickstarter more time consuming and expensive than is necessary. On October 23, 2013, the SEC clarified and proposed additional crowd funding rules, which, while not as onerous as they might have been, are still far from perfect (and may not be as good as the current financing rules).

The highlights of the new rules are as follows:

• The company would be able to raise a maximum aggregate amount of $1 million through crowd funding offerings in a 12-month period.
• Crowd funding transactions must take place through an SEC-registered intermediary, either a broker-dealer or a funding portal.