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Crowdfunding Firms Press Their Case in Washington

As the U.S. Securities and Exchange Commission moves to finalize long-awaited new rules that will allow anyone to invest in early stage startups, crowdfunding companies are pressing regulators to limit potentially costly disclosure requirements and other rules that they fear could be debilitating for their fledgling industry.

The founders of Wefunder, a Y-Combinator-backed startup, sat down with SEC officials in Washington last month to outline their concerns with some of the proposed rules. Executives at  the online venture capital site FundersClub met with White House and Treasury Department officials at MIT on May 19, according to FundersClub CEO Alex Mittal.

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“You give yourself a two-year window where you have real transactions that you can look at and analyze and look at whether the SEC got it right with the rule,” says Tom Quaadman, the Chamber’s VP for its Center for Capital Markets Competitiveness.

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Joe Lonsdale
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One debate is over how crowdfunders can curate the companies on their sites. The law prevents them from offering “investment advice or recommendations”; crowdfunding companies want the flexibility to promote some companies over others.