Treasury Department Cites CCA for Data and Regulation Crowdfunding Improvements

The U.S. Department of the Treasury released a report detailing how to streamline and reform the U.S. regulatory system for the capital markets. Treasury’s evaluation of current capital market regulations found that there are significant reforms that can be undertaken to promote growth and vibrant financial markets while maintaining strong investor protections. The report was in response to Executive Order 13772 issued by President Trump on February 3rd, which calls on Treasury to identify laws and regulations that are inconsistent with a set of Core Principles of financial regulation.

“The U.S. has experienced slow economic growth for far too long. In this report, we examined the capital markets system to identify regulations that are standing in the way of economic growth and capital formation,” said Treasury Secretary Steven T. Mnuchin. “By streamlining the regulatory system, we can make the U.S. capital markets a true source of economic growth which will harness American ingenuity and allow small businesses to grow.”

In July, 2017 CCA was interviewed for the report in a call with Karen Kerrigan, President and CEO of the Small Business and Entrepreneurship Council. All their recommendations were included in the final report. They included:

1. Allowing the use of Single Purpose Vehicles
2. Fixing an error in the final bill to now allow investors limits based on the ‘greater of’ income or net worth
3. Increasing the cap from $1M to $5M

To support Treasury’s claims, results from CCA’s report “One Year into Regulation Crowdfunding and It Is Off to the Portal Races” were used. The full Treasury report can be found here.

Regulation Crowdfunding Offerings Surpass 500

Today marks a milestone for Regulation Crowdfunding. The 500th company has filed with the Securities and Exchange Commission to raise funds via online portals. The chart below show the cumulative number of offerings since the launch of Regulation Crowdfunding on May 16, 2016. Since then 51% of these companies have raised over $66M from over 65,000 investors.

A key take away from the image is the rate of growth in offerings from 2016 to 2017. 2016 ended the year with 188 total offerings. 2017 is into its 3rd quarter and has already hit 500 offerings; a 266% growth over 2016 offerings … with another quarter yet to come.

CCA/World Bank Announce the Publication of Crowdfunding’s Potential in the Caribbean

From the forward written by Bryan Zhang Co-Founder and Interim Executive Director Cambridge Centre for Alternative Finance:

“Following their trailblazing work on Crowdfunding’s Potential for the Developing World (infoDev,2013), the authors of this report [Crowdfund Capital Advisors] carried out empirical research to assess the potential of crowdfunding in the Caribbean. It focuses on the prerequisite ‘building blocks’ for a thriving crowdfunding ecosystem – user capacity, laws and regulations as well as technology. It also put forward an array of actionable recommendations for key stakeholders, both public and private, to foster financial innovation, empower entrepreneurs and scale crowdfunding development in the Caribbean.

This assessment is comprehensive, lucid and timely. In essence, it provides a practical ‘road map’ for Caribbean nations to not only unleash the power of crowdfunding, but also to effectively harness it for the benefits of businesses, communities and the wider economy. To develop crowdfunding and make it work for individual countries, a deeper understanding of the evolving local market dynamics, the need of funders and fundraisers, the intricacy of regulatory environments, the robustness of legal system and aspects of technical capability is required. Therefore, as this report advocates, a holistic and ‘ecosystem-based’ approach would be best placed to unlock the potential of crowdfunding in the Caribbean, whilst ensure the development is sustainable and appropriately regulated.

The full report can be seen/downloaded here.