Comparative Analysis of Crowdfinance

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A comparison of different forms of crowdfunding.

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  • 5/21/2018 Comparative Analysis of Crowdfinance

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    COMPARATIVE ANALYSIS OF CROWDFINANCE

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    TITLE II: Private Issuers TITLE III Crowdfunding (proposed)

    Publicly Raising (PIPR)

    Reg D 506c exemption 4(a)(6) exemption

    FORM D filing FORM C, C-U, and C-AR filings

    No audited financials and no annual Audited financials and annual reporting for

    reporting requirement offerings in excess of $500,000

    Costs vary depending on Costs vary depending on banking fees if anybanking fees, if any

    No offering limit $1M offering limit every 12 months

    Must provide SEC verification that issuer Limited general solicitation, such as

    or intermediary confirmed that purchasers tombstone ads directing investors to portal

    were accredited

    Intermediary or funding portal not required Must use funding portal or registered

    intermediary

    ADVANTAGES ADVANTAGES

    Can raise unlimited amount without Title III Unlimited number of shareholders

    disclosure burden; unlimited advertising Can help convert customers into

    opportunities shareholders

    DISADVANTAGES DISADVANTAGES

    New burden on issuer or intermediary to $1M cap on annual raise; more reporting

    confirm with the SEC that accredited investor requirements than with Title II; disclosure

    status was verified demands may be costly; all 4(a)(6) investors

    must fully comply

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