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M&R Expands Breadth of Expertise with Crowdfunding Practice

January 15, 2015

Crowdfunding is the practice of raising monetary contributions for a business or venture from a large number of investors via the Internet. Since 2010, crowdfunding has experienced explosive growth, and become a $5 billion industry. Platforms like KickstarterIndiegogo and Crowdrise permeate the financial news and are gaining investor acceptance—offering developers and owners a new way to finance projects, and start-up entrepreneurs an inexpensive way to raise capital.

Case in point is Neil Young’s PonoMusic, which launched its Kickstarter campaign on August 1, 2014, quickly raising $6.2 million. Kickstarter is a rewards-based model, enabling people to pre-purchase products, or make donations. PonoMusic then shifted to the equity platform, Crowdfunder, raising an additional $4 million. The portable PonoPlayer music device is already on the market for $399.

Due to its rapidly evolving nature, crowdfunding raises many legal questions and challenges. M&R’s Corporate & Securities
Advertising & Digital MediaCommercial Litigation and Real Estate Departments support an interdisciplinary Crowdfunding Practice, making us distinctly qualified to advise on issues relating to company and fund formation, entity and deal structuring, private and public financing, compliance under the JOBS Act, the Federal Securities Acts, state “blue sky” laws, state consumer laws, and M&A transactions.

The collective experience of our attorneys uniquely positions M&R to counsel investors, entrepreneurs, developers and operators with respect to the crowdfunding industry. We work with clients at every stage of the process, to assist emerging entrepreneurs and companies in obtaining equity and debt financing for their businesses and projects.