WASHINGTON DC: Listen up, fashion entrepreneurs- the “Crowdfunding Law” is about to massively shake up your fund raising game!
Finally, 3 years and 7 months after the JOBS Act was originally passed in 2012, the SEC has finally released rules on Friday, October 30, 2015 that will pave the way for startups and small businesses to raise up to $1 million in funding via true “equity crowdfunding” from the general public, not just wealthy investors. Though this is US news, its beyond relevant for Singapore’s burgeoning startup ecosystem as numerous companies that were not able to raise seed money or an A round earlier can now access the vibrant US investor landscape.
Fashion investing has been a well-kept secret and one overlooked by most VC’s, angel investors and incubators. The JOBS Act Title III is about to change all of this. One of the first to capitalize on this upcoming ruling, US-based Fashion Fund is pre-launching its investing platform, fashionfund.com on Nov 15, 2015, in Singapore, to become the world’s first equity crowdfunding platform that applies Title III of the JOBS Act to fund highly sought after fashion tech startups and designers in Southeast Asia and beyond. “We were schedule for a Summer 2016 launch at the Echelon Conference but radically advanced our deadlines to create momentum in advance of the Crowdfunding Law to go into effect”, says Kartik Ram, Fashion Fund’s Founder, who recently returned to Seattle from Singapore, where he was involved in a series of successful startups. Fashion Fund is now setting up its Asian headquarters in Singapore so Kartik may well shuttle between the two markets, bringing exposing his growing list of investors to disruptive startups in Southeast Asia.
“This law has the potential to dramatically change how fashion designers, ‘internet of things’ startups and up and coming brands get funded, in a world where banks simply will not lend to them,” says Kendall Almerico, Venture Beat’s highest ranked attorney in their list of the 20 most influential crowdfunding thought leaders in the world. Kendall is also Fashion Fund’s General Counsel and lending his legal perspective to ensure that non-US startups play in a level playing field with domestic American companies in the race for early-stage capital.
Fashion Fund’s founder, Kartik Ram shares Kendall’s view. “We need to reward investors who lost out on countless investment opportunities because they were not allowed to participate freely and earn equity. Title III of the JOBS Act truly levels the playing field between the free-flow of investment into tech and that into other verticals.”
With equity crowdfunding, a business can initiate an online fundraising campaign similar to what they may have otherwise launched on Kickstarter or Indiegogo. The difference is that they can now sell shares in their company – this is a holy grail for fashion and hardware startups as they now have the ability to attract a whole new segment of investors and raving fans who want to be a part of their company’s growth story in addition to pre-ordering their products.
Though it sounds simple, this online investment would not have been possible before Title III of the JOBS Act went into effect. The fund raising boom that will result from this profound ruling could pave way for a whole new wave of retail brands that were waiting to be discovered but held back from lack of startup capital.
Almerico notes that in late 2013, the SEC released 585 pages of draft rules for this equity crowdfunding law that, by the SEC’s own calculations, could cost a new business as much as $30,000 to raise $100,000. “My team at BankRoll has worked with Fashion Fund to find ways to reduce these costs dramatically so the equity crowdfunding law can be the incredible funding tool it has the potential to be,” Almerico says. For thousands of brilliant, disruptive startups and designers, this ruling could be huge. “Democratization of fund raising in an election year is on-trend and something to welcome with open arms,” Kartik concludes.
About Kendall Almerico: Forbes has called Kendall Almerico one of the top JOBS Act and crowdfunding attorneys in the country. Kendall is a regular crowdfunding and JOBS Act columnist for Entrepreneur.com and he has been interviewed in the New York Times, USA Today, Forbes, Bloomberg, The Washington Post, The New York Daily News, Reuters, Chicago Tribune, Huffington Post, Christian Science Monitor, Business Insider and on CNN, Fox News, CNBC, CBS, ABC and NBC. Mr. Almerico is also CEO of BankRoll Ventures LLC and practices law at DiMuroGinsberg in the Washington DC area.
About Fashion Fund: Fashion Fund (www.fashionfund.com) is the world’s leading equity crowdfunding marketplace for fashion labels and hot startups who wish to fund their products, designs and global expansion with help from a crowd of tens of thousands willing to support them. Fashion Fund intelligently connects potential investors with worthy startups, matching their risk profile and allowing them to seamlessly invest online. The designers, labels and products that are featured on Fashion Fund are tightly curated and represent the world’s best, most disruptive and financially rewarding opportunities. Through its affiliation with BankRoll, Fashion Fund is partnered with a SIPC/FINRA approved broker dealer to facilitate transactions.