Re: the drafting of the law (to Andrew’s and Joe’s points) — yes, the Crowdfund Act is hardly a gem of legislative clarity and consistency. My bias is that it’s better than nothing, but it’s definitely worse than “good.” (But at risk of sounding like a Christensen acolyte … many great things get their start as the “worse but cheaper (and available)” option

Because I can’t resist, I will add one quick clarification. My point is definitely not to knock crowdfunding as “worse but cheaper” or “worse but easier” — far from it. (Number two on my list of concerns about the new exemption was its cost.) The exemption could have been beautifully simple, but instead it is a 10-page behemoth with tons of details, compliance steps, new SEC registration regimes, special calculations, new civil liabilities, etc. I think securities exemptions are better for business when they are short, clear, and easy to use. My fear is that this exemption is “worse but more expensive” and “worse but harder,” that it could end up being like those donations to help starving children in Africa where the charity promoters collect $100 a pop from thousands of contributors but keep $40 for their overhead, etc. My fear could be misplaced for an unfundable company whose other option is a loan shark, but I hope that’s not my audience! It could also be possible that private actors come up with cost-control solutions.

But that misses the point in two ways. First, the people who will be doing Crowdfund Act raises aren’t the ones with an option on a large Reg D round; it’s the people whose other option is no capital, or dubiously legal capital, or loan sharks. Second, the cost, hassle, expense, and delay inherent to the current way of doing legitimate offerings (e.g. Reg D or Reg A or other exemptions) won’t transfer over to the Crowdfund Act offerings — they can’t, because as you rightly point out, it won’t work. That’s like saying man can never walk on the moon, because there’s not enough air to breathe. The premise is true, but irrelevant.

Maybe a better example would be saying that Uber would never work, because there are taxi licensing regimes to deal with in all the major cities.

There are tons of legitimate concerns about / problems with for-profit crowdfunding, but we won’t see the shape of it simply by extrapolation from the shape of existing securities offerings; that’s my main point.