The rules of how private companies capitalize in the United States is mostly the governance of the federal government.
The definition of an accredited investor from the Securities and Exchange Commission is still largely outlined by the Securities Act of 1933. Changes and advisements have come steadily in the last decade, including the JOBS Act in 2012. Most recently, this August, the SEC expanded its definition of an accredited investor.
These are efforts to expand the types of outside financing that private companies can access. These changes have spurred innovation from the private market.
Consider two such examples of alternative funding: Clearbanc, a Toronto-based company that is experimenting with equity-free investing to help startup founders grow their businesses, and Republic, a platform for crowdfunding startup investment.
Both are prominent examples of the ways in which the financial world is adapting to become more open, accessible and equitable. Any investor should be well-informed on the tools companies have.
We’re exploring the topic on this week’s episode of Off the Sidelines, an investor education podcast produced by us at Technical.ly and sponsored by Project Entrepreneur, a program by UBS. (We’ll be doing a live recording of a future episode of Off the Sidelines on Nov. 17 — join us.)
To explore alternative funding strategies, we spoke to Andrew D’Souza, the CEO and one-half of the prominent founding behind Clearbanc, and Republic CEO Kendrick Nguyen.
Project Entrepreneur wants to improve the enabling environments for female founders and advance inclusive capital, including diversifying the pipeline of investors and supporters. This mission aligns them with efforts across the investment community to redefine who is a funder and who gets funded.
Listen to the full episode to hear how private market investing is changing, and what that means for investors as well as entrepreneurs.
We have more episodes coming up this season with conversations from notable figures throughout the investing world, so be sure to subscribe and keep up to date with all our episodes.