Seeing the Crowdfunding Exemption Become Legal

Last Thursday’s signing of the JOBS Act at the White House was fun.  After going through three layers of ID checking and an airport-style walk-through detector, I walked into a garden area where a military band was playing some surprisingly jazzy tuneage.  The mood was festive– the ice water in paper cups was flowing generously, and the weather was fine. In the sea of DC people, the only folks I recognized (or had met only via email) were my crowdfunding revolution comrades– Jenny Kassan; Kevin Lawton; Woodie, Jason, and Zak from Startup Exemption; Michael Shuman; Danae and Slava from IndieGoGo; Karen Kerrigan; Dana Mauriello; Amy Cortese; Howard Leonhardt; and of course our man in the White House, Doug Rand from the Office of Science and Technology Policy, who had worked with all of us, and many others there whom I haven’t met. Presumably Doug had gotten the whole gang invited, which was really nice.

Filing into the Rose Garden

Soon we were led around to the Rose Garden, where there were chairs for the audience, the stage and podium and TV cameras aplenty. After everyone was seated, a bunch of entrepreneurs from around the country gathered around the signing table, including Steve Case of AOL and the White House’s Startup America initiative, and Samantha Abrams, owner of Emmy’s Organics— I met her later; she’s the young woman in the blue cardigan. Also around the table were Rep. Patrick McHenry, who introduced the first crowdfunding bill into the House and whom we all therefore consider a hero, Sen. Scott Brown (R-MA), who introduced a crowdfunding bill into the Senate, and House Majority Leader Eric Cantor.  I’m not sure if Sen Jeff Merkley (D-OR) was there, but I didn’t see him on the stage — he introduced another CF bill and co-wrote the final Senate version that the House approved and is now law.

Then President Obama walked out and made some remarks about the legislation– it was a good explanation that didn’t use the word “crowdfunding” anywhere. I learned later from Kevin, who had talked with someone from the Treasury department who had written most of the speech, that they avoided the term because it might be unfamiliar and confusing to many people.

Then he walked over to the signing desk and signed the bill using multiple pens, probably only about one letter each, so that more people could get souvenir pens as gifts.  His patter while signing is not reflected in the official transcript, so I present it here for the benefit of historians: “All right.  It’s — it takes a while. Left-handed. That’s the third left-handed president out of the last four presidents. Bill Clinton was left-handed and George H. W. Bush was left-handed.” Then a guy with white hair in back said, “It makes for better rotation on the” [garbled – “jump shots”?] Obama answered, “Is that what it is?” Then he finished signing and said, “There we go, it’s done.”  Then he stood up and chatted a bit with the people around the table before walking back inside.

After a bit more mingling and frequent picture-taking (everyone was doing it), we were ushered out. Kate Mitchell and Steve Case hosted a reception afterwards at the rooftop bar of the nearby W Hotel. There I talked with Andrea Sreshta of luminAID  who told me about her friend Jeff Warren of the Grassroots Mapping project, which has taught and used DIY aerial photography to enable people in Lima, Peru to avoid forced relocation, and to document the effects of the 2010 Deepwater Horizon oil spill in the Gulf of Mexico. I also talked with Slava, who told me about the Veloso 3D Printer, a kit project on IndieGoGo for a 3D printer that forms objects top-down, layer by layer, by projecting light onto a liquid polymer bath– which is faster and gives higher resolution than ABS extrusion.

From there I went with Danae and Slava to a reception hosted by Woodie Neiss and Startup Exemption at the “Off The Record” bar at the Hay-Adams hotel.  Woodie had just been at an entrepreneurship conference in Instanbul hosted by MIT, where some high-up government minister told him that Turkey would be #2 after the US with crowdfunding legislation, and Kevin reported having talked with high-ups in Brazil about interest in getting it going there as well. Everyone was amazed at how fast the idea of a crowdfunding exemption progressed in this country, and we expect it to happen worldwide.

From my point of view, it’s been amazing to pursue it from an idea I blogged in late 2009 to a successful crowdfunding campaign to fund a petition the SEC, and then continue covering it, meeting and introducing like-minded activists and now see it signed into law. The question came up at the Hay-Adams who would tell this story, and Doug said it would probably best be told Rashomon-style, from multiple points of view. I totally agree.

More photos and video:

Sign at entrance to White House

The band

Cameras aplenty
Sound check guy
Entrepreneurs and legislators around signing table

President Obama walks out

Rooftop bar at the W hotel.
Slava and Danae in front of the "Off the Record" bar

24 thoughts on “Seeing the Crowdfunding Exemption Become Legal

  1. I don’t often agree with Sen. Bernie Sanders but I’m with him on thinking that the effect of this crowdfunding bill will turn out mostly to be a cesspool of fraud taking advantage of many investors who can least afford to lose their money.

    1. The “Blue Sky Laws” were passed because things like this make the sort of fraud HeavyG is concerned about frequent. The problem was that they also stopped regular people from getting funding from none-family members for start-up businesses. However, there were a lot of success stories from the time before the Blue Sky Laws were passed. Notably Control Data Corporation as Seymour Cray explained in one of his speeches.

  2. Congratulations to you, Paul. And well-documented, too. I would probably not have had the presence of mind to record events as well as you did. This is one of the coolest things I’ve seen on the blog in a very long time. And while I think some abuses of crowdfunding are inevitable, I also expect the changes to do so much more good than bad, and at a time when our country is rather desperately in need of entrepreneurship. Your involvement in this work is something I am proud to be associated with just by sharing a masthead with you. I can only imagine how you must feel.

    Also, from an interesting wikipedia article… =]

    According to Daniel Geschwind, a professor of human genetics at UCLA, in 2008: “Six out of the past 12 presidents is statistically significant, and probably means something”.


    1. Thank you, Sean! Yes, people will attempt sleazy things– but the new “funding portal” business will be competitive, and it’s in their interest to vet thoroughly and maintain a good reputation. Also, it will be hard for fraudsters to believably spoof interaction among groups of people who know one another.

      I would love to discuss this with you some time soon! Lots of fun possibilities for helping makers, and all the new funding portals springing up will desperately need their good ideas. Just like the cliche from the early days of the web: “content is king.”

      That’s interesting about the presidents– so, who’s the first baseball player president going to be?

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Paul Spinrad is a broad-spectrum enthusiast, writer, maker, and dad who lives in San Francisco. He hatches schemes at http://investian.com.

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