506(c): Some Perspective

So, did you wake up this morning to find a pile of investment money, or some new shares in a great company, or a bunch of new job offers falling from the sky?  Me neither; bummer eh?  In fact, unless you were looking really closely you might not have realized that anything had changed at all.  Yes, there are some new companies generally soliciting investment from accredited investors, but it isn’t a deluge, and the GDP hasn’t spiked 5% overnight.

So does this mean that general solicitation a bust?  Has the JOBS act failed?  Is securities-based crowdfunding also doomed?  No, not at all, but it does mean that we need to have realistic expectations.  Working in the online investment space it is hard to remember that the vast majority of people, including entrepreneurs and investors, don’t yet know about or understand the changes that are happening (pdf).  It will take them a while to really figure out what is available and decide to try it.  With this in mind it is inevitable that volume will start low and increase as more people get comfortable with the concept.  This pattern is common with new innovations (remember life before e-commerce? No? I am the only one old enough to remember that? Ok then.)

The point is that this is the start of something big, but it is just the start; so don’t get discouraged if everything doesn’t happen all at once. Instead, work hard, think about how these new methods of online investment might work for you, and get yourself ready to act, on your own timeline.

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