On May 16,2016 a number of rule changes were ushered in to the regulations in the United States as it relates to “Crowd Funding” and the “democratization” of investing for the non-accredited investment community. It stemmed from the Jobs Act Title III, allowing any company to accept investment for up to $1M a year from non- accredited investor (individuals with incomes under $200,000 a year or a liquid net worth of $1M or more) in increments of around $2,000.
As it relates to Grace Century, who is not in the Crowd funding sector, we have warned for years of the pitfall of this model. The idea of “anyone can be a venture capitalist” for a little as $2,000 screams warning to us. “The vetting and oversight just won’t be there” argues Scott Wolf, Grace Century’s CEO. “In addition no start-up is equipped to handle 1,000’s of individual investors in their early stages. The intention seems good, i.e. help business, create jobs, and level the investment playing field; but we think this will spell disaster.”
In a recent CNBC interview an industry commentator agrees – click here to to see the CNBC interview.