This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

The Deal: States Greet Crowdfunding With Hostility

Some of the states are a little tougher, like Ohio, Massachusetts and Illinois, but others have been welcoming, Lipnick said.

For example, Lipnick said Crowd Alliance is working on a partnership with the state of Hawaii called Five M Bloom, which will allow Hawaii's entrepreneurs to raise money through crowdfunding that will be matched by the state.

They want "to allocate capital, dollar for dollar, to develop new companies in the state of Hawaii," he said.

Lipnick said Crowd Alliance is looking for investors for Five M Bloom. He declined to comment on how much Five M Bloom plans to raise. He said it would start small with low dollar amounts.

Crowd Alliance also is negotiating with representatives of New York Gov. Andrew Cuomo on a similar partnership in the Empire State.

Lipnick said the states have been understandably cool to crowdfunding because it is such a new business whose rules have yet to be written by the SEC.

"We're optimistic that once the rules are solidified, the states will be more receptive," he said. "They realize they have to create jobs. Let's do it the right way."

The right way to regulate crowdfunding remains a work in progress, according to Jilliene Helman, the CEO of RealtyMogul, a Beverly Hills, Calif.-based portal for real estate deals.

"To some extent, oversight is wonderful and we welcome it," she said. "We're going to hold ourselves accountable to our investors and customers."

The problem with Ohio's enforcement action against SoMoLend is that it cites behavior that's been going on for years, she said.

"There's been rampant general solicitation going on for 10 years at pitch events," Helman said. "What's not smart is a state going after things that have been happening for a long time, especially when the rules are going to change in a month.

"To use taxpayer money to go after people who have been trying to follow the rules doesn't seem like a good use of time," she said. "What would be better would be to establish a working relationship with the portals to make sure they get crowdfunding right, like the SEC did with peer-to-peer lending players like Lending Club and Prosper Marketplace."

6 of 7

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
AAPL $128.54 -0.63%
FB $80.90 1.63%
GOOG $573.37 -0.05%
TSLA $202.44 1.44%
YHOO $43.99 3.21%


DOW 18,096.90 -106.47 -0.58%
S&P 500 2,098.53 -9.25 -0.44%
NASDAQ 4,967.1410 -12.76 -0.26%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs