Author Archives: Kiran Lingam

About Kiran Lingam

Kiran has a passion for helping young companies do big things. In his time before SeedInvest, Kiran worked at a corporate and securities attorney at the law firms of Jones Day LLP and DLA Piper LLP, where he served as outside legal counsel to venture capital and private equity funds, angel groups and over 30 technology startups. He has seen first-hand the struggles encountered by early stage entrepreneurs and believes strongly that many more startups would be successful with additional avenues for early stage capital. Since passage of the JOBS Act, Kiran has been an active speaker, writer and commentator on crowdfunding and the related legal issues. He is a Charter Member and Executive Team member of TiE (The Indus Entrepreneurs) and is an active member of a number of groups in the New York startup community. Kiran received a B.A. in Economics from Cornell University and a J.D., with honors, from the University of Georgia.

Equity Crowdfunding Rules: 15 Things Every Entrepreneur Needs to Know Now

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Equity crowdfunding promises to open up a new financing source for thousands of capital starved businesses around the country.   Many entrepreneurs are wondering what this means for them and don’t have time to digest the complex 585 page rule proposal.

For those entrepreneurs without large amounts of spare time or excess legal budgets, here is a quick list of items that you should be aware of now:

1)     It’s not legal yet.  The rules can still change.  The proposed rules were released on October 23, 2013 and are currently in a 90 day comment period.  The absolutely earliest that equity crowdfunding in the US could become legal is in the Spring of 2014, but more likely it will be Fall or Winter 2014.

2)     Up to $1,000,000 in Financing.  Private companies may soon be able to raise up to $1M in a 12 month period from an unlimited number of investors in small amounts (as low as $50 or $100 each).

3)     Individual Investor Limits.  Each investor will have a cap on the amount they can crowdfund in a year, generally between $2,000 – $5,000 for those with income and net worth below $100,000.

4)     Investor Self-Certification.  Unlike Rule 506(c) of Reg D, Investors will be able to self-certify their income, net worth and previous crowdfunding investments.   So no worrying about checking investor tax returns or brokerage statements.

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