Equity Crowdfunding Round-up

People in the know with ECF have been aware for some time of the strange discrepancy that allows worldwide ECF platforms to promote their campaigns in the US but not take any investors from there. A recent example was the Vivobarefoot campaign. The company smashed its target easily but was clearly frustrated that one of its major markets, the USA, had not been able to partake. The problem is the SEC. Their regulation on ECF and who can invest is far more stringent than anything in the UK or Europe and they have a history of penalising companies that step out of line. The story goes that, a few years ago, another platform operating outside the US did take investment from US citizens and ended up with a sizable fine.

This is all about to change. Title III of the JOBS Act recently came into force and this allows non-accredited US citizens into the game. This will then open up the US to the rest of the world – or that is the theory. One UK platform, which already has a US office, is still not convinced that it will be that simple. We just have to wait and see. People I talk to in New York say that companies are queuing up in anticipation and it could just be that the pressure gets to such a stage, that the SEC have to open the sluice gates.

The initial success of the ECF-funded Elio Motors’ IPO seems to have run out of steam, for the moment at any rate. Launched at $12, the shares rapidly rose to over $50 in February but are now trading nearer to $20.