EarlyShares Urges Congress to Allow Crowdfunding in the U.S.

Using evidence from countries where crowdsourcing has taken hold, such as the UK, EarlyShares is pushing to get full legal backing for its new business model, pointing out that crowdfunding leads to greater and more widespread innovation and success in business.

EarlyShares, in the mold of companies like the Dutch Enviu, is a new start-up which aims to facilitate equity-based crowdfunding services in the United States. Despite the recent passing into law of the Entrepreneur Access to Capital Act, crowdsourcing is still a legal grey area and in its infancy as a business model in the U.S.

The buying and selling of equity, or part ownership, is still a troublesome aspect of the crowdfunding model. Even with the new law in place, exactly how investors are protected is still not entirely clear. The selling of shares is still not allowed because of fears of widespread fraud. Opposition to crowdfunding was based around this fear as well as concerns over the usefulness of crowdsourcing in lowering unemployment.

The video from Congressman McHenry, introducer of the Entrepreneur Access to Capital Act, is prominent on the front page of EarlyShares.com. It highlights the problems with the current system of Wall Street and big banks that is not at all free of fraud or human error. The argument is clear: not only is fraud not a problem unique to crowdfunding, it has led to a reduction in fraud over traditional banking.

The feared scams have not emerged in other crowdfunding markets; share trading is allowed in the UK and it is already a $2 billion industry. EarlyShares argues the idea that the American citizen cannot be trusted with investment and should leave it to institutions is baseless.

UK's "CrowdCube" has already raised over U$2.5M for six companies from hundreds of small investors after operating for only a few months. EarlyShares.com CEO Maurice Lopes is encouraged by these impressive results.

Imagine how many new businesses and new jobs could be created if only the U.S. followed suit. This is the change the country needs. People don’t want useless government bailouts; almost all previous government stimulus never reaches the little guy starting a company. Let’s face it the doors are all closed for most entrepreneurs; there is no more uncollateralized bank loans, no fat business credit cards, no HELOC’s; banks aren’t even lending on SBA loans unless it’s for real-estate; with no money, no new businesses, no new jobs. Crowdfunding is working well in the UK. It is time for the U.S. enjoy the same success.
Maurice Lopes, CEO of Earlyshares.com