In the works since June but now released last week from the SEC, makes equity crowdfunding a reality for U.S. small businesses. To date, only accredited investors could invest in equity positions of these companies. Non-accredited investors will now be able to invest $2,000 or 5% of their annual income, in a 12 month period. Additionally, non-acc investors will be limited to $100,000 of securities through crowdfunding.
A maximum of $1,000,000 in a 12 month period limits these small companies but does open up to a larger investment base. The new SEC rules also remove the audit requirement that was originally enacted. That past requirement often added $25-$50 k in upfront cost to raise funds.
We believe that this one provision alone could become the very life-blood to the already expanding url/domain industry. Domain owners and developers will no longer need to sell their domain assets to raise working capital. They could now incorporate around a portfolio of domains/websites, and sell an equity position in that asset, while still continuing to hold a majority ownership position.
The new ruling is part of the SEC JOBS Act, a law designed to make it easier for startups and small businesses to raise capital from a wide range of potential investors. This new ruling will go into effect May 16, 2016!
Anyone watching the global domain industry might compare what’s happening now to the Dot Com bust of 2001-2002? The Chinese are presently 80-85% of the market. They are driving up prices for domains like 989.com over $800,000!
It would be easy to write this all off, but wait. There is still plenty of growth area in the Chinese market and when that’s done the next BIG THING will be India! Yes, India where there are still over 700 million that have not yet reached the Internet. Of the small businesses in India that are connected to the Net and have a web presence, there are still millions that still do not own a domain. I personally saw this coming almost twenty years ago and even persuaded, my then partner to make the long trip to India. It wasn’t all my idea, because we had an engineer friend from Los Alamos Nat’l Lab in New Mexico that was from India and he was the true visionary. By the time the dust settles in India it will be time for the second coming of the U.S. Internet market. Old farts like me probably won’t even be around, but the 5-10 year old’s will be and they will tear this Internet up! I only have one reservation to this future growth potential and it is…what if someday you just have to type in or say bizmakerdomains?
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