Wefunders Nick Tommarello Posts Comment on SEC Concept Release: Currently, Reg CF is Most Often a Funding Option of Last Resort – Crowdfund Insider

Wefunder, the leading crowdfunding platform using the Reg CF securities exemption, has posted a comment letter on the Securities and Exchange Commissions concept release authored by Wefunder co-founder and CEO Nick Tommarello.

The SECs concept release is an ongoing consultation on the current regulatory environment for exempt securities offerings. Wefunder has offered securities under Reg CF as a FINRA regulated funding portal but the platform has also issued securities under both Reg D and Reg A+. It is widely known that Reg CF has been an effective tool for companies to raise capital but current rules have hampered its development and success. Under Reg CF, issuers may raise capital from both accredited and non-accredited investors via FINRA regulated funding portals or broker-dealers within a strict set of limitations.

According to Tommarello;

As the rules stand right now, Regulation Crowdfunding (Reg CF) is most often a funding option of last resort. Issuers even often choose to raise no money rather than potentially hamstring their future.

Tommarello provides advice as to how to fix the shortcomings of Reg CF while providing insight into necessary changes to the definition of an accredited investor as well as comments on both Reg A+ and Reg D.

Regarding improvements to Reg CF, Tommarello suggests the following:

Regarding the definition of an accredited investor, Wefunder recommends a fix that allows for a sophistication qualification as a wealth metric is not the best method of judging investing acumen.

Pertaining to Reg D, a securities exemption currently only available to accredited investors, Wefunder believes it is important that non-accredited investors are able to access these investments but only if:

There is more.

Wefunder is not alone in advocating for fixes to Reg CF, as well as improvements to Reg D, Reg A+ and the definition of an accredited investor. The SEC Concept Release is accepting comments until September 24th. It is not clear what changes the SEC will be willing to make or if the Commission expects Congressional action.

The Wefunder letter is embedded below.

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Wefunders Nick Tommarello Posts Comment on SEC Concept Release: Currently, Reg CF is Most Often a Funding Option of Last Resort - Crowdfund Insider