The Important Role Of A Crowdfunding Transfer Agent

by | Feb 22, 2018 | Financial Services

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Today, one avenue for any entrepreneur or small business to consider for finding financial capital for a business is to use crowdfunding. There is an increasing use of crowdfunding as banks, and traditional lenders are often unwilling or unable to finance some of these startup or small companies.

There are several different crowdfunding sites. To give just a brief idea of the popularity of this option, particularly in the United Kingdom and the USA, there was over 16.2 billion USD raised in 2014 and an estimated 34.4 billion USD in 2015.

However, this process is not as simple as setting up a website on a crowdfunding platform and collecting the money. A startup company or business wanting to use the platform will need to utilize a crowdfunding transfer agent.

The Role of the Agent

A crowdfunding transfer agent has to be very aware of all SEC regulations to ensure the crowdfunding is legal and doesn’t create any violations. In addition, these agents have to be independent, or in other words, they cannot be a part of the business that is engaging in the crowdfunding enterprise.

The crowdfunding transfer agent is also important for investors. The agent will be the “reputation” of the investment in the business. A recognized agent for a top stock transfer company provides investors with the confidence that their investment is being recorded, processed and managed correctly and according to all requirements.

The agent will do a wide range of services for the business as well as the investors. This includes providing Safe Harbor Protections as well as providing electronic stock certificates that shareholders can access online.

For the entrepreneur or startup business, the transfer agent may also be able to assist with all required filings. Make sure the agent selected is a Registered EDGAR filing agent as well as a transfer agent to take advantage of this service. Visit Colonial Stock Transfer Company, Inc for more info.

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