Emory Law Journal


David Mashburn


This Comment analyzes the hidden transaction costs in the Crowdfund Act, particularly the severe liability cost this provision imposes on issuers. Crowdfunded offerings present a new environment in which innocent but inexperienced entrepreneurs face increased risk of making a misstatement or misleading omission. Crowdfunded offerings confront a number of issues not faced by mature companies making public offerings, including the high failure rate of startups, the difficulty of working with emerging technology, the entrepreneurial psychological predisposition to risk, a lack of sophisticated disclosure assistance, and a dearth of due diligence.