Open Access. Powered by Scholars. Published by Universities.®
Articles 1 - 1 of 1
Full-Text Articles in Securities Law
The Social Network And The Crowdfund Act: Zuckerberg, Saverin, And Venture Capitalists' Dilution Of The Crowd, John S. (Jack) Wroldsen
The Social Network And The Crowdfund Act: Zuckerberg, Saverin, And Venture Capitalists' Dilution Of The Crowd, John S. (Jack) Wroldsen
Vanderbilt Journal of Entertainment & Technology Law
By virtue of Title III of the JOBS Act, signed into law on April 5, 2012, crowdfunding could become a powerful, even revolutionary, force to finance start-up companies. It democratizes entrepreneurs' access to seed capital and converts the masses of Internet users into potential retail venture capitalists. Many have cautioned, though, that crowdfunding poses serious investment risks of start-up companies failing, committing fraud, and being mismanaged. Accordingly, the JOBS Act includes numerous disclosure obligations designed to mitigate such downside risks.
But what has been overlooked, and what this Article analyzes from a venture capitalist perspective, is that even if a …