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Crowdfunding: Are You an Owner or a donor?


In this video, I interview Georgia Quinn, a co-founder and CEO of iDisclose, a web based application that assists in the preparation of institutional grade, private placement documents. This interview took place at the CREW Network Annual Convention in Bellevue, Washington in 2015.

Georgia and I discuss the difference between two types of crowdfunding. One in which the public can contribute to the development of a product, company or service and in essence buys the product or service in advance.  A perfect example of this type of crowdfunding is the Pebble Watch in which the public was given the opportunity to help Pebble create their smartwatch and in return, they received a watch before it was available to the general public.

 

The second type of crowdfunding is the type in which the public can buy some type of ownership interest in the company and share in the increased value of the business.  You’re buying an equity interest in the company, not a product or service. Because of this, the sale of these equity interests are subject to both state and federal securities laws. This is where we see most, if not all, of the commercial real estate crowdfunding offered.  Watch the full video to get a clear understanding of the difference.

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Something to Add?

  • Great interview Howard and I learned so much from it. I appreciated knowing the terminology and the differences. Great job.