Media Coverage
Source: Law360
Media Coverage
01.28.13
The U.S. Securities and Exchange Commission is expected to issue final rules later this year related to the JOBS Act's so-called crowd funding statute, which allows businesses to raise up to $1 million per year from individual investors. Christian Salaman, a partner is Pillsbury’s Emerging Growth & Venture Capital practice in San Diego, comments on the new crowd funding statute.
“Whether you're a corporate attorney or real estate attorney or anybody else trying to put together some kind of deal, equity funding has been a difficult environment over the last couple of years,” Salaman said. "I think crowd funding is a result of that difficulty."
With any endeavor that has many investors, Salaman says a crowd-funded business or project could encounter challenges later in the game, with disclosures and investors' involvement in growth and development.
“Investors are going to feel entitled to information and want to be involved in the process,” whether it's creating a business or renovating, building or maintaining a property, Salaman said. “It's going to require a lot more work for people who raise this money than they may realize. There will be a lot more legal maintenance and information maintenance than just sending out investor notices.”