By:
Jim Verdonik
Jim Verdonik
Founder of Innovate Capital Law
Contact me at:
(919)616-3225
You can purchase my books at http://www.amazon.com/Jim-Verdonik/e/B0040GUBRW
(This article is based on a speech about
Crowdfunding at NC State University Club March 17, 2015 and will be the
introduction to a soon to be released book)
Effective capital-raising in the digital era
requires you to recognize that most of what you thought you knew about how to
raise capital is either obsolete or soon will be obsolete, because:
- Walls
protected the old ways of raising capital.
- These
walls are falling down because of a combination of new technology and
changes in securities laws.
- Powerful social and economic forces are driving these changes.
With every change, there are winners and
losers.
Which will you be?
The biggest potential losers are Wall
Street and Silicon Valley venture capital fund managers. Wall Street and Silicon Valley are the biggest
potential losers, because they currently control all the money. So, when technology and securities law
changes knock down the walls that protected their money monopoly, they are at
the greatest risk.
But being potential losers doesn't mean
they will be the actual losers.
The guy in the room with the most money is
always the biggest potential loser.
Somehow, however, the guy with the most
money usually manages to win. A lot of
very smart people work on Wall Street and in Silicon. So, Wall Street and Silicon Valley may very
well adapt to changes and find ways compete without their old walls. They may even erect new walls.
Our concern here isn't to advocate for or against
Wall Street making money. Our goal is to
discover the pathway to reasonable securities regulations and efficient
capital-raising and to point the way to take advantage of these changes. Achieving these goals requires:
·
Understanding the walls
that have constricted capital-raising for the past four score years.
·
Understanding which
walls have broken down and why.
·
Understanding which
walls are still standing.
·
Understanding who wants
to keep the remaining walls standing and why.
Here's a list of the ten walls we'll be talking about:
·
Social Class is Playing a Smaller Role in
Determining Who Can Climb over the "Who You Know" Wall
·
Main Street Can Raise Money without Hitting the
Wall Street and Silicon Valley Walls
·
Public Private Placements: Combining General
Solicitation with a Private Placement Destroys the SEC's Wall Between Public
Offerings and Private Placements
·
Transparent Communications Knock Down the Wall
that Connected Anti-Fraud Rules Fraud and Limitations on Exemptions from
Registration
·
Social Media is Destroying All Privacy Walls:
Capital Raising is No Exception
·
How Disintegration of the Wall Between
Communications Tools and Mass Media Complicates Securities Regulation Issues
·
How Erosion of the Wall between Business and
Entertainment Affects Capital Raising
·
Going Viral within Affinity Groups is the New
Door through the Investing ROI Wall - Hobbies and Social Interests Influence
Investing Patterns
·
Who is a Securities Professional after the Wall
between Professionals and Amateurs Disintegrate?
·
Deal Lawyers Have to Know More than the 1933 Act
as Technology Enhanced Offerings Erode the Walls Between Different Securities
Laws
