Clarity Over JOBs Act Could Boost Crowd Funding in Business Sales

11 Jul, 2013, 04:22 ET from

NEW YORK, July 11, 2013 /PRNewswire/ --

Nearly half of business buyers would consider using crowd funding despite its strong association with innovative start-ups, a survey has revealed.

As the Securities and Exchange Commission met yesterday (July 10) to vote on a crucial part of the Jumpstart Our Businesses Startups Act (the Jobs Act), business buyers would apparently be keen to solicit funds from the public through online platforms were they liberated from burdensome regulatory and compliance obligations - as the Act seeks to overturn.

While only 17% of the hundreds of would-be business buyers polled by said they had contemplated using crowd funding to raise funding, this figure rose to 44% as a proportion of aspiring buyers who were actually aware of the concept. Sixty-one percent of buyers did not know what crowd funding was.

However, with the concept explained in the survey question, many expressed an interest in learning more and possibly using platforms like Crowdfunder, Crowdcube and Fundable, which are dominated for now by early-stage, tech start-ups with strong prospects for rapid growth.

Twelve percent of buyers say they've either used crowd funding in the past or expect to use it in the future.

Meanwhile, 43% of business brokers, who often help buyers source funding, believed that ongoing credit problems made crowd funding ideal for buying a business.

Andrew Markou, CEO and technical director at, says: "Tapping into the social media zeitgeist and helping to bridge the still-yawning funding gap, crowd funding is a genuinely exciting development in business finance. If the SEC successfully removes the regulatory hurdles then crowd funding might become a viable tool for some - albeit not all - business buyers."

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