Thank you for a good question! This topic aligns closely with CfPA's policy platform, and here is our position on the matter.

Crowdfunding by Portals

We support allowing portals to raise funding on their own platforms as long as the relationship is fully disclosed and the number of raises is limited (e.g. one per year). Requiring portals to raise on competitor’s platforms creates an unfair limitation on portals’ ability to raise under Reg CF.

Background

Crowdfunding portals are prohibited from posting an offering of their own securities. Since portals are the de facto experts of their requirements and processes for facilitating crowdfund campaigns on their own platforms, it would make the most sense for them to be able to facilitate their own raises. Posting an offering on a competing platform can be awkward and cumbersome, plus there is a risk that the competing (i.e., offering) platform would not be properly motivated to provide the best level of service to a competitor.

Should crowdfunding portals be allowed to create and facilitate an offering of their own securities on their own platforms, they will be able to do this with enhanced efficiency and a greater degree of diligence in accordance with their own standards of service and excellence. This would strengthen the crowdfunding ecosystem by providing platforms easier access to capital by marketing to their own account-holder base.

Requested Change

We request an amendment to the JOBS Act to allow the SEC to change Rule 227.300(b) to remove the limitation on intermediaries having a financial interest in issuers on their platform to create a minor exception that allows the intermediary itself (and affiliates) to conduct a campaign on their own platform. 

Statutory Authority

This change would require an amendment to Section 4A(a)(11) of Title III of the JOBS Act.