What do you think of the ideas in the bloomberg news article forwarded by Jaime Chua? Please send your comments. Thanks.
Crowdfunding for Internet Stock Sales Approved by SEC
I came across this article that may be of interest to you and members of the committee and also relevant to the series “From Seed.to Exit”. It hints at what may be the future of business funding for small businesses – investment crowd sourcing over the internet for venture funds.
Current crowd funding, is considered a form of sales (incurring an income tax liability) as the contributors do not get equity in the company . However, when the proper legal framework is up, small businesses should be able to get funding over the internet by issuing shares. The cost of venture capital will be lower (cutting out the fund managers), and the terms will be less onerous since funding will be from a big number of venture capitalists investing only HK$20,000 to HK$100,000 each (instead of from one or few investing millions of dollars).