Crowdfunding Attorney AMA

  1. All crowdfunding campaigns are required to use an internet intermediary. They will want to make money somehow. Today is the first day that can legally operate, so we will see shortly if they plan on taking a cut. Investors in your company will have the same legal rights as any other investors.

  2. Like any other corporation or LLC that is in compliance with application law, the risk is only to the money invested. If the company goes bankrupt, then the investors lose their investment. This is why investing is inherently risky.

  3. This is solely dependent on the business and the investors. The law doesn't offer any guidance here.

  4. You can ask your current customers to invest in your crowdfunding campaign. However, advertising is heavily regulated. The bulk of advertising must be through the crowdfunding portal.

  5. Do you mean if the investor is not happy? The investor has rights, but depending on how the stock issue was structured, they may not have many options. Investors always have to right to sue, but since each individual investor likely only invested $2000, I doubt they would sue because its cost prohibited.

  6. Corporate tax law is complicated and is completely dependent on the situation. In very general terms, companies only pay tax on profits. Investment is not generally considered profit.

  7. Investors are not customers, and buying a stock is not generally a taxable transaction.

  8. Protecting IP is always a concern. However, as r/startups often points out, the idea not nearly as important as execution. If you are doing a crowdfunding campaign, you are well into the execution phase.

/r/startups Thread Parent