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Crowdfunding 2.0: Where Will It Go?

Congress has created a set of rules that will make equity crowdfunding too cumbersome for most businesses, but there is still a chance to get it right.

In last spring's JOBS Act, Congress gave the SEC 90 days to enact rules for crowdfunding, a new type of Internet-based securities offering through which a large number of investors can buy shares in small businesses. The SEC probably has never adopted a rule in 90 days, and the underfunded agency is already way behind on dozens of rules required by the 2010 Dodd-Frank Act. But the logic of election-year politics has never been logical. Now Congress is shocked--shocked--that the SEC has not met the deadline.

After the crowdfunding rules are adopted, Congress will again be shocked--shocked--that they are excessively burdensome. No matter that it is Congress' requirements that are burdensome. It will still be amazed that the burdensome rules it asked for are precisely what it gets.