Editor’s Note: The following recap of last week’s forum on the JOBS Act and crowdfunding for equity in the United States comes to us from Dara Albright and NowStreetJournal.com. Albright is one of Crowdsourcing.org’s resident experts in the area of crowdfunding.

On Friday July 13, 2012, CFIRA, the leading regulatory advocacy group for the crowdfunding industry, hosted its first public forum wherein the nation’s key lawmakers, regulators, crowdfunding enthusiasts, entrepreneurs and investors all came together to discuss the rules that will eventually govern Crowdfund investing under the JOBS Act.

Exemplifying the same collaborative principles that define the very essence of Crowdfunding and which led to the swift bipartisan passage of its legislation, CFIRA’s Development of Crowdfunding Regulations Symposium was hailed by many as a significant milestone in the progression of America’s capital markets.

It was truly an honor for me to have participated in this historic event. I left D.C. feeling optimistic that our regulators are making a genuine effort to understand both the intent of the legislators as well as the needs of the entrepreneur in order to implement rules that will not only serve to protect investors but to advance the formation of small business capital.

Because I have been inundated with requests, highlighted below are a few revelations and predictions that emanated from the day’s discourse.

The day began with Vince Molinari, CEO of GATE Technologies and Co-Chairman of CFIRA framing the conference by echoing the sentiments expressed in the event program:

“We would like to thank Congressman Patrick McHenry, Senator Jeff Merkley and Senator Scott Brown for helping to democratize the capital markets and inspire economic growth through the introduction of meaningful and ground-breaking legislation. We would also like to commend the SEC and FINRA for their willingness to engage, and their eagerness to participate in these important discussions as they diligently and expeditiously endeavor to create the new regulatory environment.” ― CFIRA

A true champion of the small business owner, Congressman Patrick McHenry (R-NC) delivered a commanding yet impassioned speech that detailed his motivation for drafting the Crowdfunding legislation. The Congressman shared a personal memory of witnessing his father use his “Mastercharge” to finance the family’s small business. Realizing that the credit crisis of 2008 would thwart bank lending for similar emerging businesses, Rep. McHenry decided to explore the possibility of amending antiquated securities laws as a solution.

The Congressman went on to suggest that the $1M ceiling for Crowdfund offerings is too low and hinted at the likelihood of an amendment being introduced to raise the threshold to $5M. I predict that in the coming months we will see more legislation from Rep. McHenry supporting the small business community as he endeavors to reignite the entrepreneurial blaze that has, throughout history, fueled American prosperity.

The Congressman concluded his speech by providing strong recommendations for the implementation of his legislation and reminded the regulators that time is of the essence.

During the panel discussions where the regulators fielded questions and shared their perspectives, both Tom Selman, Executive VP of Regulatory Policy at FINRA as well as David Blass, the Chief Counsel of the SEC’s Division of Trading and Markets affirmed that the primary goal of the regulators is to “make the JOBS Act a success”. Blass further acknowledged that the commission is working diligently to get a rule proposal out which will most likely occur sometime after the SEC’s August 22nd Open Meeting where the Commission will be considering rules to eliminate the prohibition against general solicitation.

Eric Strasser, Co-founder of Gomite, who successfully crowdfunded his product, the Tiltpod, on Kickstarter, articulated the difficulties of raising capital in today’s challenging environment. But what I found most compelling about Eric’s presentation was his account of the invaluable brand awareness that resulted from his Kickstarter campaign. As bloggers from across the globe began praising the Tiltpod based purely upon product merit, Eric explained how he was able to garner consumer support and funding without spending one dime on marketing. What a stark contrast to the micro-cap public markets where issuers are impelled to pay dearly for ineffective, disingenuous IR/PR campaigns. For those who still don’t quite “get it”, allow me to reiterate: Crowdfunders are not interested in trading tickers; instead, they are drawn to a company’s products, its mission, its value to the community and its positive impact on society. They envision a more profound upside – one that is unfathomable to the trading mentality.

The outlook expressed by Andy Green, Legislative Counsel to U.S. Senator Jeff Merkley (D-Oregon), really resonated with me when he opined, “Ultimately, the success of Crowdfunding won’t be measured by the amount of money raised, but rather by the quality of the companies being launched and their performance in the marketplace.”

The event concluded with Candace Klein, CEO of Bad Girl Ventures and SoMoLend and Co-Chair of CFIRA, delivering a moving summation, “The air in the room today is important. Competitors are working together for the greater good, for a cause larger than any one of our companies. Regulators have been open to multiple conversations with industry leaders, and have been willing to accept our feedback and even take our advice. We do this because we all have the same goal in mind. We want to democratize access to capital for the entrepreneur, and we want to open a new opportunity for investment to an entirely new population of investors.”

CFIRA’s symposium was more than a gathering. It was the symbolization of the unity and progress that will lead us into a new era of the social stock market where quality supersedes quantity, integrity trumps promotion, and where even adversaries will coalesce to foster American ingenuity and economic growth.

Tags: cfira, crowdfunding, dara-albright, jobs-act, nowstreet

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Recapping CFIRA’s Symposium on Developing Crowdfunding Regulations