What Is — or Isn't — Crowdfunding, Anyway?

Are all three of the provisions that were ushered in under the JOBS Act to ease restrictions on capital raising actually crowdfunding?

William Beatty, president of the North American Securities Administrators Association (NASAA) and Washington’s Securities Director says no.

“While it may be convenient for some to ‘lump’ together [the] three separate JOBS Act’s titles as ‘crowdfunding,’ it is not technically accurate,” Beatty said.

Is crowdfunding a concept or a regulatory matter?

“As a concept it could mean anything — reaching local investors to raise capital for small or growing businesses (i.e., funding through the ‘crowd’). As a regulatory matter, federal equity ‘crowdfunding’ is defined and specifically authorized by Title III of the JOBS Act,” and is the law’s provision that requires the SEC to issue rules.