Wefunder, a crowdfunding platform*, announced Our crowdfunding round:
So, we ate our own dog food. Using current state “blue sky” laws (which prohibited advertising), we raised $533,800 from 58 investors in amounts ranging from $100 to $100,000. Half of these investors were un-accredited.
It’s still not legal to use a crowdfunding platform in the U.S. So how did they do it? Wefunder shows you in How To Legally Crowd Invest…. Now. A summary:
- Only up to 35 un-accredited investors may invest.
To remain in compliance with the law, the total number of unaccredited investors – across all states – can not exceed 35. But, with the exception of investors in Massachusetts, the start-up can raise from an unlimited number accredited investors (in CA and NY).
- Investors must be a resident of CA, NY, and MA.
These states have “blue sky” laws that allow un-accredited investors to invest, without requiring a costly investment prospectus (a few other states have laws that may possibly work, but you’d have to confirm with your lawyer).
- No advertising or general solicitation is allowed.
You can’t broadcast your offering to the world. You can’t post your deals on Facebook, Twitter, get mentioned in the press, put out an ad, etc.
- Companies must comply with various State laws.
CA and NY require filing a notice and paying a small fee. MA has no filing or fee, but has different compliance issues.
Cracks in the Patent Wall
Published April 19, 2012 Activism , Commentary , Law Leave a CommentPatents have been broken for 30 years since the rise of software and the improper extension of patent law to the digital domain. The dysfunction has accelerated with the rise of the Internet and mobile access that make the digital realm a fundamental part of modern life.
The large incumbent tech companies have been so bureaucratized that they’ve integrated IP in their operations, much like companies in other countries think nothing of paying bribes or playing whatever regulatory, legal, or illegal games are part of the cost of doing business. Patents are amassed by the thousands and deployed like troops in offensive and defensive formations as a strategic weapon against hostile or encroaching enemies. Companies continue to form to buy patents or outsource their management and prosecution.
And so the status quo has continued, while lone wolfs like the EFF howl in protest. Renegade billionaire Marc Cuban says your company’s largest risk is that you WILL get sued and not once but by dozens or a hundred lawsuits.
This permissive business-as-usual attitude is changing. Startups are starting to adopt ‘patent hacks‘ that give individual inventors certain rights. The goal is to share and use patents purely for defensive purposes so that companies can compete without the overhang of legal action.
If you’re an entrepreneur I urge to incorporate these patent provisions in your IP docs.
Twitter has signed on to this practice. VCs are jumping on board as well. So perhaps this is a growing trend and not a brief fad. There is hope yet that a tech industry that finally united to kill SOPA and push the JOBS Act can continue to work together to contain, if not reform, an innovation-stifling part of the legal system.
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