Equity Crowdfunding For Broker And Dealers

An exemption in the Securities Act allows start-ups to conduct a version of crowdfunding today, as long it’s through broker/dealers. Succesful examples are CircleUp and RockThePost.

The Washington Post:

Crowdfunding “is a natural extension to our current business line,” said John Holman, chief executive of Point Capital Markets, which specializes in early stage investing. “Using a portal [like Earlyshares] expands the people we touch.”

PointCapital is entering the crowdfunding space, because “the first one to the race is usually the winner,” Holman said. He noted that EarlyShares’ site already draws the kinds of investors who will likely participate in public crowdfunding.

Rory Eakin, founder and chief operating officer of San Francisco-based consumer products crowdfunding platform CircleUp, has been operating exclusively for accredited investors for almost two years. Several start-ups have successfully raised capital on the platform.

CircleUp is partnered with registered broker/dealer WR Hambrecht, but Eakin said the platform is currently applying for its own broker dealer license, which would allow it to generate revenue from sales on its platform.

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