The Future VC Ecosystem: Easier to Obtain Capital?
Last March, the US Securities & Exchange Commission announced that it intends to raise the funding caps to:
a.) $5 million using Crowdfunding (aka “Reg CF”);
b.) $10 million using Rule 504 of Reg D; and
c.) $75 million using Reg A+.
Latest recommendations made to the US SEC include the addition of “a micro-offering exemption” to allow “retail investors to invest in a wider range of small businesses through pooled investment vehicles.” This would appear to be more of a classic fund structure.
It is expected that the higher funding caps for at least Reg CF will provide entrepreneurs of small startups greater access to venture capital that is very much needed for growing their companies in such a bleak economy.
Foreign companies can also tap into the US market and utilize the abovementioned funding vehicles under certain circumstances. If the above recommendations prove viable in the US (and crowdfunding became a very popular method to raise capital in the wake of the 2009 depression), then the EU Member States may just follow suit soon enough.
For more information on how your company may be able to raise venture capital in the US or EU, please contact our experienced lawyers at firstname.lastname@example.org