In a Senate Banking Committee Hearing today, Sen. Warner pressed SEC Chair Mary Jo White to introduce regulations for equity crowdfunding, a tool that allows entrepreneurs and small businesses to raise capital over the internet. Putting regulations and a legal framework in place for equity crowdfunding would allow it to be used far more widely than it is today.
“There’s enormous opportunity to use this new tool for equity crowdfunding that can really help rural markets, smaller markets that don’t now have access to early-stage capital,” Sen. Warner said. “I’ve travelled around Virginia and around the country, and there’s a nascent industry waiting for the regulations to get done.”
Sen. Warner worked with colleagues to make equity crowdfunding a key component of the bipartisan Jumpstart Our Business Startups (JOBS) Act, which was signed into law by President Obama in April of 2012. However, the SEC has yet to issue final rules that would allow equity crowdfunding’s legal implementation.
“Let me acknowledge, I don’t think the SEC will get this perfect the first time out. But I do think there will be the ability for the internet to self-police a bit and call out bad actors. The potential upside is great in terms of connecting capital to entrepreneurs that otherwise is not going to exist.”
“I think there still is, despite the length of time, a great deal of excitement out there about this,” responded Chair White. “Crowdfunding rulemaking is certainly on one of our front burners.”