Media Coverage
Source: JD Supra
Media Coverage
05.15.13
JD Supra turned to three lawyers, including Christian Salaman, a corporate & securities technology partner in Pillsbury’s San Diego North County office, for a legal perspective on whether crowdfunding under the JOBS Act was over-regulated, and therefore, ultimately useless.
“Crowdfunding will only be as good as the portals that will be required by the regulatory regime to funnel the opportunities,” Salaman said. “Winners and losers in the portal game will emerge, and then the winners will dictate its value. The legitimate fear is that these winning intermediaries – and their desire to extract value, or their inability to continue to find winning companies – will sap the strength of the crowd.”
He noted that entrepreneurs have been raising capital for centuries without tapping the crowd. “It may not be as alluring (or as easy) as harnessing social media, but it still works to pitch friends and family and then graduate to professional investors or lenders when the time is right. And I continue to see the strongest startups financed by adventurers who are willing to risk credit card debt (and even their homes).”
Salaman commented that crowdfunding is a lot less appealing to the entrepreneur than most realize. “The sophisticated entrepreneur does not want dozens of cooks in the kitchen. If another option exists at comparable pricing, the investor will avoid all the administrative headaches – legal and non-legal – that come with crowdfunding.”