October 30th, 2013 Raising Capital through Crowdfunding - Now Possible Due to Recent Legislation


On October 30, 2013, OLC attended the event, “Raising Capital through Crowd Sourcing: Now Possible Due to Recent Legislation” hosted by the Asian American Entrepreneur Network.  The speaker of the event was Sang Lee, Founder and CEO of Return on Change.


The event began with Sang Lee introducing himself as the Founder and CEO of Return on Change. Prior to founding Return on Change, Sang worked as an investment banker in the energy field at WestLB and BNP Paribas where he acquired and developed his expertise in financial regulation, business, and financial structuring. Furthermore, throughout his investment work in the energy sector, Sang Lee has developed significant experience in the advisory and execution of more than 10 billion dollars equivalent in energy transactions in North America.

After introducing himself, Sang posed the problems of traditional funding methods. According to him, traditional funding methodologies are limited to borrowing from friends and family or convincing venture capitalists to invest in your idea/product. However, traditional methods are inefficient, slow, and geographically limited in the digital age. The 21st century digital economy demands increased capital accessibility and reach while providing investors more opportunities to invest in and engage with startups/companies that are in their interest.

The solution to this problem according to Sang can be remedied through crowdinvesting/funding platforms. Sang’s own crowdinvesting/funding platform, Return on Change is designed to spur innovation in the 21st century digital economy. The Return on Change platform is a business solution that connects investors to high-impact startups looking for ways to improve the world. As such, Return on Change is on the forefront of utilizing technology and crowdinvesting to spur the future of innovation and economy.

After introducing himself as well as Return on Change, Sang went on further to explain the impact of the recent 2012 JOBS Act has made on crowdinvesting/funding ventures. Two sections of the bill directly or indirectly pertain to online crowdfunding whereby, Title II of the JOBS Act allows private startups and small businesses to raise investment funding publicly. Therefore startups now may use sites like Facebook or Twitter to help publicly solicit funding.

Furthermore, Title III of the JOBS act allows “non-accredited crowdfunding.” This component of the JOBS Act enables non-accredited individuals to participate and invest online into private companies in small increments (say $1,000 to $5,000). As such, individuals no longer take on as much risk as would an accredited investor

As a result of the JOBS Act, crowdinvesting/funding platforms such as Return on Change can effectively provide an alternative path in funding and investing by not only placing more autonomy in the hands of startup founders but the investors are given the ability to easily browse investment opportunities and directly communicate with startup founders.