March 26th, 2015 by: Grow VC Group

On the 25th of March, the SEC voted and approved Title IV of the Jobs Act also known as Regulation A+. The rules will go into effect in sixty days.

The new rules revolutionize the existing and little used Regulation A, which previously allowed companies to raise up to $5 million from investors without going public, making it more efficient and opening new investment opportunities to both accredited and non-accredited investors. In fact, complying to Regulation A, was so costly and burdensome (it among other things required the companies to fill the papers and register in each State they wanted to raise capital in) that has been hardly used since it was put into effect.

With these modifications, Regulation A+ has all the premises to become a real game changer for access to capital and investing in the USA. In fact, on one side, companies that are neither early stage nor mature enough for an IPO can now access the capital they need to finance their growth soliciting it from potentially all US adults; on the other side, early stage investors will have the chance to get some liquidity, after having had their money tied up for many years,without waiting for the IPO.

Crowd Valley welcomes Regulation A+ and believes that it will have a fundamental impact on the capital markets. The SECs ruling on the definition of a Qualified Purchaser for Regulation A+ is also groundbreaking and will likely result in wider applicability of the newly enacted regulation.

Read the whole article and more details about Reg A+ on Crowd Valley Blog.

SEC HQ Washington D.C.

March 26th, 2015 by: Grow VC Group

The Financial Conduct Authority has published a guide on how finance companies should promote their services through social media. In fact with the growth and establishment of investment companies 2.0, which manage their operations mainly through online portals, social media have become a powerful and fundamental media to attract new investors and clients. The FCA therefore deemed that more detailed guidance was necessary to guarantee investors’ protection.

The UK’s Authority considers financial promotion any form of communication (including through social media) including an invitation or inducement to engage in financial activity. This guide is the first case of a Financial Authority publicly recognizing the importance of social media communication for digital investing businesses and trying to find an adequate compromise, in order not to make it impossible for the companies to communicate through those channels and at the same time protect the investors from misleading communication.

Read summary of the guidelines and more details on Crowd Valley Blog.

FCA Social Media Guidelines

 

March 25th, 2015 by: Grow VC Group

Fraud has been very small or totally missing problem in p2p lending and crowdfunding in most of countries. In China fraud is a real problem and The China Banking Regulatory Commission is planning to introduce new requirements for the p2p lending platforms. They would include e.g. a minimum registered capital requirement for the platform companies. According to unconfirmed reports the minimum capital would be 30 million yuan (appr. 4.4 million euro).

Chinese p2p lending market was over 250 billion yuan (appr. 37 billion euro) in 2014. According to reports 275 platforms had some problems in 2014. The owners of 60 platforms disappeared with money and 71 were reported to have scams.

China’s experiences are a good reminder for other markets too: some regulation is needed. The regulators must find a right balance to guarantee this important and effective new model of finance. It is important to monitor the platforms and their operations. And it is also important to develop more tools for lenders and investors to protect their investment especially against fraud.

Read the whole article on P2P Safety Blog.

China p2p lending

March 24th, 2015 by: Grow VC Group

The UK’s National Fraud Intelligence Bureau’s (NFIB) proactive intelligence team has become aware that fraudsters are looking to utilize “boiler rooms” to target crowdfunding. Crowdfunding services are regulated by local regulators. Regulation varies between countries. But as all finance and investing models, crowdfunding can also attract parties that don’t follow laws and regulations.

Wikipedia defines ‘boiler rooms’ in the following way: “In business, the term boiler room refers to an outbound call center selling questionable investments by telephone.” Traditionally boiler room models have used especially for ‘pink sheet stock’ or ‘penny stock’ type shares. The boiler room tactic is well known e.g. from the movie The Wolf of Wall Street.

Read more and NFIB’s recommendations for investors on P2P Safety Blog.

Pink sheet

March 23rd, 2015 by: Grow VC Group

ArcticStartup, a startup media company in the Nordic and Baltic region, has decided to start a new project: CoFounder, a print magazine about the European startup industry. The project is a result of cooperation between Dmitri Sarle, CEO of ArcticStartup, Greg Anderson, Editor-In-Chief of ArcticStartup, and Tarmo Virki, a former Reuters journalist and Head of Forbes Estonia. The first issue will be published soon.

There are three main CoFounder’s objectives. Dmitri Sarle says that the team wants to help European startups by (1) giving them new business ideas, for example, by asking investors what kind of companies they are looking for, and by (2) providing tools to grow startup business. A lot of attention will be paid to successful and failure startup stories to guide others. The last CoFounder’s objective is (3) to offer company analysis and deep insights into successful startups.

Read more and find ways to support CoFounder (including Indiegogo campaign) on Startup Commons Blog.

CoFounder

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