I worry over the crowdfunding provisions of the JOBS Act. We will soon begin to hear stories of people, scraping by, investing $10,000 or 10% of their income into a venture that quickly went bust. Then we’ll hear of scams by predators in the money chain. Finally, we’ll hear from Congress, closing the easy money loopholes, requiring more public information (and legal responsibility by those publishing it).

How do you handle 400 tiny shareholders anyway? Who keeps the stock register? Who informs them when shareholder votes are required to create new classes of stock, approve a new option plan, or other shareholder voting requirements? Yes, some lawyers will say that you can just notice these small shareholders. But wait until they start screaming that they didn’t know, or understand the implications of the action.

Dodd-Frank was a hasty congressional reaction to events, as was Sarbanes-Oxley. Someday it will be Berkus-Steinberg or a similar duo, protecting the sheep from the wolf…

-Dave