Crowdfunding legislation

I posted about this on Facebook to the pirates group back when this first became news, because this freaking awesome, and is exactly an example of technology bringing people closer together which we should embrace (and government should not be blocking).

Have used kickstarter once before to get an Ouya console. I feel that this is something we should support, as with the exception of Oculus Rift (now part of Facebook), crowdfunding usually leads to good things being made.

Crowd funding is a good thing. It should be unrestricted with in the normal laws surrounding fraud.

This is the problem though. This law is not about the kind of crowdfunding @andrewmcpherson is talking about, it weakens some of the normal laws surrounding fraud - for example those requiring a registered prospectus for those looking to invest their money - then openwashes that by calling it "crowdfunding". I find this deceitful, and I think the PP should be criticizing it as such.

I think that a prospectus can actually be detrimental to the environment, as well as small scale investor dividends. I know for a fact that most prospectus cost more to print every year than the dividends of the average shareholder return. (No, I am talking about typical people, not the 1% which @davidpeterson will eventually bleat about.)

It is investment and not a donation against a token gift- that is clear. In a country that promotes gambling like we do crowdfunding is a way for some people to switch and learn to estimate risk properly. If it turns out to be a way just to sell what would have been normal stock market shares in a deregulated market then criticism would be in order.

Realistically, if the investment is less than what I'd want to spend on a computer, then I think I'd be able to assess the risk and manage it better without a major breakdown of all the pros and cons according to the prospectus.

There is no reason a registered prospectus couldn't be online, instead of printed. so I think @andrewmcpherson is now greenwashing this possible openwashing ;)

However, I'll admit to a fairly limited knowledge of how investment, equity, shares, the stockmarket etc all works. If some of you have had a good look at this new kind of "crowdfunding" and you can explain why you think it's legit, I'll take your word for it. I just don't want to see us being useful idiots, and supporting things uncritically just because they use buzzwords we have positive associations with.

We could develop a "code of conduct" for crowdfunded enterprises. For example; call for transparency before and after achieving the funding goal. Scientific projects should release research results as open data. Art projects be released under creative commons licenses.
Not high priority but we would be doing something positive for a change.

I would stress that the costs of a formal prospectus are more in line with projects costing over $2 Million in investment. To that end, the proposed business would be wasting investors money on a prospectus that would be better spent on a business plan outline for investors of the type usually provided on crowdfunding projects webpage.

1. @andrewreitemeyer I would suggest that we should not impose regulations that may be premature, as if the entire information about a business plan is outlined to all before investment there is nothing to prevent competitors taking the plan and the investment opportunity away.