The House of Representatives passed the Crowdfunding Amendments Act (H.R. 4860), which would expand permissible uses of crowdfunding.
Representative Patrick McHenry (R-NC), who introduced the bill alongside Maxine Waters (D-CA), said that it was designed to reverse the decline of small-business lending and loans by encouraging investment crowdfunding. Specifically, the bill would:
- incentivize high-growth companies to use crowdfunding by increasing the asset threshold for (i) small businesses with existing revenue and (ii) startups without revenue; and
- allow the use of single-purpose funds (wherein groups of people make joint investments in a holding company that makes one investment in the issuer), which are not currently allowed by the SEC.
Commentary / Steven Lofchie
The SEC appears far more enthusiastic about crowdfunding than do state securities regulators. See, e.g., NASAA Sees Sharp Spike in Crowdfunding on the Internet; Task Force Monitoring Crowdfunding Activities for Increased Signs of Fraud.
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