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DealFlow Media CEO Steven Dresner on how crowd funding helps small businesses and the limits being considered in Congress.
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Hot topic it's all about jobs in Washington and pressure to stimulate growth in small businesses forcing congress.
To reconsider one fiercely debated topic it's called crowd funding.
-- -- about it's a way for smaller businesses to raise capital without using an IPO using social media like FaceBook instead Stephen Dresser is founder and CEO.
Deal flow media easier to tell us more.
Now the problem is is that there are so many details.
That the government is is thinking is saying okay you can do this you can collect capital on though the new web.
Up to like what a thousand dollars 101000 dollars the last she'd eliminated it's being widely discussed is up to one million dollars in any given annual here I -- but for the investor you're only allowed to spend a thousand dollars and one bill or 101000 dollars in the -- -- -- -- deal per company in senator Scott.
Brownsville it's a thousand dollar threshold in and the more discussed about bill proposed by Patrick McHenry it's 101000 up.
Or 10% of your income whichever is less so it's effectively -- 101000 dollar.
When -- sexually bipartisan support for this because small businesses are struggling what's the biggest advantage and then conversely the disadvantage.
Yeah I would say the biggest advantages that you know the reality today you know investing is a social activity in the reality of.
Net working today in marketing today is that the Internet is a core piece of that so.
The idea of the concept of raising capital over the Internet just sort of makes sense.
I guess the disadvantage is if you have a wider array of people investing into all these small transactions.
There is the potential for fraud which is the main issue that's being.
Well and and and there's also the potential of the tremendous increase in lawsuits you think of how many businesses fail particularly small businesses it's about 50%.
They're all these proviso is that if there is a failure there are things that investors can do.
Like go to court to get so this might dramatically increase the number of lawsuits we have and core crowd out our court system I guess that's great for the the lawyers and right.
-- -- -- Perhaps.
And I think the bulk of companies that start out there -- under capitalized.
You the statistics are probably that one in ten business is actually succeeds I don't you would define success in running a small business.
-- but but I see ultimately be onerous on investors not the government to regulate.
Invest thing you want certain protections in place of course.
But I think that that it's not really a matter of if we're going to see some form of crowd funding it's it's a matter of line that's one that's the market going forward Stephen -- -- -- thank you very much Stephen is having its work.
