Bill Overview
Title: Improving Crowdfunding Opportunities Act
Description: This bill reduces regulations applicable to crowdfunding securities and portals. Crowdfunding is used to raise capital through a large number of individuals investing potentially small amounts of money. The bill exempts certain securities issued under crowdfunding regulations from state regulation of secondary transactions. It also exempts crowdfunding portals from certain anti-money laundering reporting and recordkeeping requirements. Finally, crowdfunding portals are exempted from liability for material misstatements or omissions unless the portal knowingly makes certain untrue statements or engages in fraud or deceit.
Sponsors: Sen. Moran, Jerry [R-KS]
Target Audience
Population: Individuals involved in crowdfunding
Estimated Size: 60000000
- Crowdfunding has grown significantly in popularity worldwide, with platforms such as Kickstarter, Indiegogo, and GoFundMe attracting millions of users.
- Globally, there are hundreds of millions of people who might consider investing in projects through crowdfunding platforms.
- Relaxation of regulations could encourage more people to participate in crowdfunding, both as investors and as project creators.
- The reduction in reporting and liability obligations could make it easier for platforms to operate, potentially broadening their reach and user base.
Reasoning
- The policy primarily impacts individuals engaged in crowdfunding, including both project creators and small-scale investors.
- Since crowdfunding is popular among younger, tech-savvy demographics, individuals between 20 and 40 years old may see more significant impact.
- The policy's relaxed regulations could drive more participation, but there's a risk of inadequate investor protection.
- Those not closely involved with crowdfunding may see little to no impact from the policy.
- Considering the current market, it's essential to include both urban and rural perspectives, as access to platforms and financial literacy varies.
Simulated Interviews
Software Developer (San Francisco, CA)
Age: 32 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 14/20
Statement of Opinion:
- The relaxed regulations make it easier for me to invest in more startup projects with less hassle.
- I am a bit concerned about the potential for fraud related to the reduced liability for crowdfunding portals.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 9 | 7 |
| Year 20 | 8 | 6 |
Small Business Owner (New York, NY)
Age: 45 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 10/20
Statement of Opinion:
- The reduction in regulations will help me reach more potential investors with less time spent on compliance.
- This potentially opens up a bigger audience for my product line, which is exciting.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 5 |
| Year 2 | 8 | 5 |
| Year 3 | 9 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 6 | 4 |
Freelancer (Austin, TX)
Age: 28 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 3.0 years
Commonness: 19/20
Statement of Opinion:
- Looser regulations might encourage more creators to use crowdfunding, which is great for the projects I like to support.
- I'm cautious about potential scams, especially with less stringent checks on crowdfunding portals.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 7 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 5 |
Retired Farmer (Des Moines, IA)
Age: 55 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 0.0 years
Commonness: 7/20
Statement of Opinion:
- I'm not affected by these changes since I don't use crowdfunding platforms.
- It doesn't seem relevant to my lifestyle or financial planning.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
College Student (Chicago, IL)
Age: 23 | Gender: other
Wellbeing Before Policy: 8
Duration of Impact: 2.0 years
Commonness: 12/20
Statement of Opinion:
- I'm excited about the potential for more campaigns to come to life with lesser red tape!
- I do wonder about the efficiency and honesty of campaigns with reduced oversight.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 7 |
| Year 5 | 9 | 8 |
| Year 10 | 8 | 7 |
| Year 20 | 7 | 6 |
Entrepreneur (Los Angeles, CA)
Age: 40 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 9/20
Statement of Opinion:
- This could be a game-changer for my business expansion plans by broadening the investor base.
- I have to weigh the benefits against the potential lack of legal recourse if something goes wrong.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 9 | 7 |
| Year 3 | 9 | 6 |
| Year 5 | 9 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 7 | 5 |
Retired Engineer (Phoenix, AZ)
Age: 62 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 0.0 years
Commonness: 11/20
Statement of Opinion:
- This policy likely won't change my well-being or investment habits.
- The changes might be useful for tech-savvy individuals, but not for me.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 5 | 5 |
| Year 5 | 5 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
Research Scientist (Boston, MA)
Age: 29 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 15.0 years
Commonness: 13/20
Statement of Opinion:
- This could make finding startups for scientific projects easier, as less compliance means less hassle.
- I do worry about the credibility of platforms that lack stringent checks.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 7 | 5 |
Freelance Videographer (Miami, FL)
Age: 37 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 20.0 years
Commonness: 6/20
Statement of Opinion:
- This is transformative for creative professionals like me; more investors mean more opportunities.
- Balancing creativity and potential financial misuse is something I hope the policy considers carefully.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 9 |
| Year 2 | 9 | 8 |
| Year 3 | 9 | 7 |
| Year 5 | 10 | 8 |
| Year 10 | 10 | 7 |
| Year 20 | 8 | 6 |
Social Worker (New Orleans, LA)
Age: 50 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 15/20
Statement of Opinion:
- I'm unsure about this policy; while supporting more causes is great, I'm worried about transparency and fraud.
- The modifications could make some campaigns problematic without adequate checks.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 6 |
| Year 5 | 6 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 5 | 4 |
Cost Estimates
Year 1: $5000000 (Low: $3000000, High: $7000000)
Year 2: $6000000 (Low: $4000000, High: $8000000)
Year 3: $7000000 (Low: $5000000, High: $9000000)
Year 5: $10000000 (Low: $7000000, High: $13000000)
Year 10: $15000000 (Low: $10000000, High: $20000000)
Year 100: $20000000 (Low: $10000000, High: $40000000)
Key Considerations
- The exact impact on costs and savings is highly dependent on the rate of adoption among potential investors and platforms.
- Changes in fraud or failure rates among funded projects could influence the perception and popularity of crowdfunding.
- Potential conflicts with state regulations need careful monitoring despite exemptions from federal oversight.