December 18th, 2014 by: Grow VC Group

The JOBS Act was enacted in 2012 largely to encourage capital raising by smaller companies. Title IV of the JOBS Act, instructs the SEC to amend or adopt a new Regulation A under the Securities Act of 1933 so that offerings of up to $50 million are exempt from registration with the SEC, up from the current maximum in Regulation A of $5 million.

The SEC issued proposed rules and forms on December 18, 2013 that would implement this directive by amending Regulation A to create two tiers of Reg A offerings:

· Tier 1: Up to $5 million in any 12-month period, including a maximum of $1.5 million in secondary sales, that are not exempt from “blue sky laws” or the securities law of US states.

· Tier 2: Up to $50 million in any 12-month period, including a maximum of $15 million in secondary sales, would be exempt from “blue sky laws” or the securities law of US states (so-called Regulation A+).

Despite additional disclosure requirements, including audited financial statements, and other obligations, most issuers would clearly prefer to explore the Regulation A+ route over the traditional Reg A exemption, given the higher maximum amount that can be raised under Regulation A+ and the exemption from blue sky laws. However, the SEC has been unable to pass final rules on Regulation A+, due in large part to the sensitivity around exempting public sales of securities from state law regulation.

Read the whole article on Crowd Valley Blog.

 

December 15th, 2014 by: Grow VC Group

Real estate crowdfunding has been growing more and more over the last couple of years, as it was also shown by our latest Crowd Valley Market Reports. This type of crowdfunding, which bases its roots in the US market, where the first dedicated portals started their activities, has increased by double between the years 2012-2013 and by the end of this year it is expected to double again.

But real estate crowdfunding is not doing well just in the US. In the UAE, for example, this innovation for the real estate sector has found a fertile ground, with more than 30 operative platforms and nearly US$5.1 billion raised in 2013, up 81% from the previous year, according to a survey. Other interesting markets are the UK and South East Asia, where one of the first incumbent is a company part of Grow VC Group.

But why is crowd investing currently booming? One of the main reasons is that the types of investments offered, which are quite various, ranging from renovations to distressed debt, usually carry high annualized returns – 10 percent to 30 percent – during three to five years investment’s life. This certainly makes real estate crowdinvesting very appealing to many investors, who did not have access to these kind of deals until a couple of years ago.

Read the whole article on Crowd Valley blog.

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December 9th, 2014 by: Grow VC Group

Two years have almost passed since the SEC was supposed to put in place a set of crowdfunding rules as indicated by the JOBS Act which was signed earlier in 2012. The US Congress, in fact, had put December 2012 as a deadline for the SEC to approve and release crowdfunding rules. Since then, the SEC published a drafted legal framework for this new financial tool last year and, after having received several comments from the public, went silent again.

But why the SEC is taking so long? Put in simple words, one of the main reasons is probably that it is not convinced by the idea of opening, with a too light regulation, securities crowdfunding to a “crowd” of non investment-savvy citizens, because it considers it a risky activity and wants to find the best way possible to guarantee the maximum protection to retail investors,on the one hand, without losing the potential of crowdfunding as an SME finance source on the other hand.

However, if on the one side the SEC is taking its time to create and approve a set of rules for securities crowdfunding, on the other side, the growing US crowdfunding ecosystem can’t wait to see some action.

Read the whole article on Crowd Valley Blog.

SEC HQ Washington D.C.

December 5th, 2014 by: Grow VC Group

By TradeUp Guest Author Albert Costilo, Founder and CEO of Global Business Fluency.

Why should US companies consider expanding to Latin America?

The short answer is that it’s a huge opportunity for growth and profit. As per the US Department of Commerce more than one-half of the US’s Free Trade Agreements—also known as FTAs—are with the Spanish-speaking countries of Latin America. We’re talking about countries like Chile, Colombia, Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama and Peru. The International Monetary Fund forecasts a growth rate of 4.5 percent for these countries in 2014. These nations share a common language and similar business cultures. They have rapidly growing middle classes with a taste for US products and services. Each of the FTA countries have made commitments to open markets with the US. So far this year, US trade with Latin America is up 5.7 percent from 2013. The real question is “what are we all waiting for?”

What do US companies entering in this part of the world need to know well in advance of entering to be successful?

Business in Latin America revolves around people before transactions. It is important to make a time investments getting to know strategic industry and business leaders in addition to business partners and customers.
Trust, or confianza, is critical and this is gained through building relationships. Confianza acts as a cement that reinforces the relationship between a US supplier to a Latin American customer and business partner.

How time is perceived creates the biggest divides for American companies doing business in the region. Time in Latin America is cyclical and unpredictable. Punctuality is not valued as it is in the US. Plan ahead for delays. Patience and not showing frustration is key when things run off schedule as they will despite the best of intentions.

Social status, power, and money play a big role in doing business. It is important to be open minded, learn how to capitalize on the nuances of hierarchical business environments.

What are the biggest mistakes a US companies make when entering Latin America?

Read the whole article on TradeUp Blog.

Latin America (source: Wikipedia).

December 3rd, 2014 by: Grow VC Group

58 billion Yuan ($ 9,5 billion) is the estimated market value of P2P lending in China as of last August. Certainly, a lot smaller than the UK’s or the US’s. However, considering that this value increased almost 90% since January 2014 and that it has already surpassed the value estimates made at the beginning of the year, it is clear that the phenomenon is growing at fast speed.

Nevertheless, the situation for Chinese P2P lending is not yet so rosy as it may appear. In fact, as Crowd Valley reported in this previous article, many Chinese platforms went bankrupt during last months, most likely due to the liquidity squeeze enacted by the Chinese Central Bank at the end of 2013 and also to the intense market competition. The result is that many players left the market, decreasing in this way the lenders’ trust.

It is unlikely that the Chinese regulator will be able to produce a regulation that keeps into account all these different P2P lending realities that have developed so far. And this is why many are afraid that the upcoming rules may be a great pushback for this new financial sector. Although at the moment it is just rumors, we are supportive of the idea that a set of rules would help the market to establish and grow. Hopefully, though, the regulation won’t be so strict to strangle the great potential of P2P lending in China.

Read the whole article on Crowd Valley blog.

China Shanghai

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