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Voice of Denver: Sen. Bennet "ColoradoSources" Input on Crowdfunding Regs

Senator Bennet talks with James Olander, founder of The Roost.

Senator Michael Bennet is seeking input from Colorado entrepreneurs, startups and small business owners to share with the SEC to help shape crowdfunding policy.
What represents "a whole new era" in venture capital?
The answer, for Denver startup founders like Pro Trotsky, is crowdfunding. And, more specifically, a piece of legislation that allows regular folks like you and me to become investors in startup companies.
Trotsky is the Founder and CEO of Denver-based Octa, which sells hands-free iPad holders and stands that can literally be placed anywhere -- from your nightstand to your shower. He was one of dozens of entrepreneurs, CEOs, start-up founders, investors, and creative geniuses that gathered in Denver on Dec. 6, 2013 to learn a little more about this whole new era in crowdfunding at a forum in Denver organized by Colorado U.S. Senator Michael Bennet, who was instrumental in drafting the law. The forum was held at Colorado State University's Denver Center Event Atrium and featured remarks by CSU Chancellor Dr. Mike Martin.
The forum comes just two months shy of the deadline to provide comments to the Securities and Exchange Commission (SEC) on its proposed crowdfunding rules, which were released in October. Senator Bennet hosted the forum to seek additional input from Colorado entrepreneurs, startups, and small business owners to share with the SEC before the deadline on Feb. 3.
"Now that the SEC has opened its draft rules for comment, we need as many Colorado voices providing input as possible," Bennet said. "That’s why we’re hosting this crowdfunding forum -- so that entrepreneurs around the state can participate in the process, learn more and make the law better with their recommendations."
"This forum is facilitating important conversations around the future of crowdfunding," Bennet added.
Crowdfunding refers to a tool many small businesses and startups use to raise capital by soliciting funds online and through social media.  Sites like Kickstarter and Indiegogo are popular crowdfunding sites that allow companies to accept monetary donations online from individuals, but they do not allow those individualsto actually buy a part of the company as an investor.
That's where Bennet's CROWDFUND Act comes in. Passed as part of the JOBS Act in 2012, it allows unaccredited investors to invest in these companies via the Internet and in turn potentially profit from those investments. We get a stake in the company, while the company raises capital.  
“Colorado has developed a reputation as a hub for innovation, with our vibrant tech, startup, and small business communities,” Bennet said, noting that earlier this year four Colorado cities were ranked in the top 10 nationally for high-tech startup density.
"Crowdfunding is yet another tool to drive this innovation, allowing entrepreneurs from across the country to tap into the potentially vast amounts of capital available online. It helps harness the huge potential of small investors and brings our regulations in line with twenty-first century advancements."
The December forum also included a panel of experts from the legal, startup, academic, and venture capital communities who provided entrepreneurs from across the state with information on how to utilize crowdfunding successfully.  While the forum was held in Denver, a livestream was available at various satellite viewing centers across the state, including Colorado Springs, Durango, Fort Collins, Glenwood Springs, Grand Junction and Salida.  
The end of the forum showcased some of the state's most innovative companies that have successfully utilized crowdfunding, including Trotsky's company. 
"These are really important events that help us transform the economic reality around funding creative concepts," Trotsky said. "We are coming into a whole new era and it’s inspiring to see these conversations take place and see government getting behind this concept."
Amity Cooper, Founder and CEO of Denver-based Sushumna Chocolat, echoed Trotsky's comments on the powerful effect crowdfunding can have on small companies going forward. Sushumna Chocolat raised more than $21,000 from over 50 contributors on Kickstarter.
"The funding environment for entrepreneurs has changed, and we need as many options as possible to finance new companies," she said. "Senator Bennet's CROWDFUND Act adds a new option for entrepreneurs where their early supporters can also share in the success of the company."
In addition to submitting comments to the SEC, Bennet encourages Coloradans to also submit feedback to his office by emailing CrowdfundingForum@bennet.senate.gov.
Those that were unable to attend the event in December can find a video recording here.

Erin McCann is Communications Assistant for U.S. Senator Michael F. Bennet (D-CO).

Voice of Denver is a featured post from Denver's entrepreneurs, experts and raconteurs. Contact us if you'd like to stand on our soapox.
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