Boing Boing, Crowdfunding, and Tomorrow’s Congressional Testimony

A couple of days ago, Pesco blogged the news that Obama's jobs plan includes the idea of legalizing crowdfunded securities.  I think this is terrific news, and I am proud that I had the opportunity to do a bit of volunteer work for the White House on this issue earlier this summer -- and it all started (and has continued) thanks to BoingBoing!

In late 2009 I learned from Boing Boing counsel Rob Rader that there was no de minimis dollar cutoff below which securities are not regulated.  As a Boing Boing guestblogger soon afterward, I pitched the idea of crowdfunding a campaign to make low-value crowdfunded securities legal. Several BoingBoing readers were interested, which was encouraging, so I collaborated with Jenny Kassan of the Sustainable Economies Law Center (SELC) and Danae Ringelmann of IndieGoGo to crowdfund the legal work (by SELC interns Aroma Sharma and Kathleen Kenney) behind a petition that the SEC posted as File No. 4-605 (PDF) on July 1 last year.  After I blogged the finished petition on Boing Boing, it began gathering support on the SEC's website.  Meanwhile, I also started a Change Crowdfunding Law blog, to chronicle the campaign. I learned later that entrepreneur Sherwood "Woodie" Neiss had been running a campaign called Startup Exemption promoting the same kind of proposal, so I emailed him to make the connection and offer my support. Then, a few months ago, Woodie and I were contacted by White House Office of Science and Technology (OSTP, the office that announced the crowdfunding exemption possibility).  They had been following our efforts, and wondered if Woodie and I could write a 2-page brief on current crowdfunding exemption proposals. Woodie and I bounced revisions back and forth via Google Docs while I was on vacation, and he sent it to OSTP. Soon afterwards they told us that the brief was very helpful -- so I was hoping during the run-up to Obama's jobs speech, which promised bipartisan new ideas, that a crowdfunding exemption would be part of the plan. Elsewhere in Washington, Woodie has been meeting with Rep. Darrell Issa (R-CA) and his staff.  Issa chairs the House Committee on Oversight and Government reform, and he has been interested in crowdfunding's economic potential for a while -- in a letter to SEC Chair Mary Schapiro from February, he asked about new capital formation strategies such as crowdfunding, and in her response letter, Schapiro said that the SEC was looking into it (citing the SELC petition). Last May, Woodie was set to testify in front of Oversight in favor of a crowdfunding exemption, but was bumped from the microphone last-minute.  Tomorrow morning, however, Woodie is testifying for sure at a hearing entitled 'Crowdfunding: Connecting Investors And Job Creators.'  I'm pleased but not surprised that the idea of a crowdfunding exemption is appealing to both Democratic and Republican elected officials in Washington.

I hope C-SPAN decides to cover this hearing, which I believe is real history in the making.  I've learned that the C-SPAN editors only decide the night before what hearings they will cover the following day, so if you want to help, please call C-SPAN's main number (202-737-3220) this afternoon and suggest that they cover Oversight's Crowdfunding hearing, which runs from 9:30am to 11:30am in Room 2154 of the Rayburn House Office Building.

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