Andy Field: [00:00:00] Hello and welcome to the GECA Podcast, the Voice of Global Equity Crowdfunding. I am Andy Fields Steering Committee lead of the Global Equity Crowdfunding Alliance, GECA, where we bring together platforms, investors, and advocates from across the globe to shape a truly borderless future for investment.

And today I am thrilled to be joined by Jenny Kassan. Jenny’s the current president of the Crowdfunding Professional Association in the United States. she’s also an attorney, coach and ecosystem builder focused on capital access for underrepresented entrepreneurs. Jenny earned her law degree from Yale Law School and a master’s degree from.

from California, Berkeley, I believe Jenny, and she’s the author of Raise Capital On Your Own Terms, how to Fund Your Business Without Selling Your Soul, and Co-founded the Sustainable Economies Law Center. The Force for Good Fund, crowdfund Main Street, and Angels of Main Street. And most recently, she founded Baltimore

Community Commons, a financial inclusion and wealth building ecosystem project. And Jenny and I met recently in an event in Los Angeles where she was there in her [00:01:00] capacity as president of the CfPA. And we immediately started some dialogue as to how we could strategically work together and CfPA have recently become GECA supporters.

And I just wanted to have a chat with Jenny to find out a little bit more about her journey in the industry and what the CfPA are up to at the moment, what they’re prioritizing. So welcome, Jenny, and thanks very much for joining us on the podcast.

Jenny Kassan: Thank you for having me.

Andy Field: No problem at all. and I think this will be a really interesting discussion.

We are, we’ll kick straight off if that’s okay. We’ll dive straight in. So if we could start about your little bit, about your journey into equity crowdfunding, that would be great. So the obvious first question is how did you first get involved in the equity crowdfunding industry?

Jenny Kassan: Yeah. So after law school, in law school I really wasn’t very focused on business. I was more focused on sort of civil rights and advocacy. But after law school, I went to work for a nonprofit which did community development in a low-income neighborhood in [00:02:00] Oakland, California. And one of my jobs was to work with the small businesses in that community.

There was like a. Kind of a commercial street with a lot of different kinds of businesses. People from all over the world, had businesses on the street and it was, in spite of the fact that it was a low income community, it was an incredibly vibrant place. Yeah. And all the business owners were so impressive and their stories were so incredible.

And I saw how they were struggling and I started to wonder why is it. That we have so much money in our global financial ecosystem, and yet so little of that money reaches these businesses and how much better the world would be if these businesses had access to some financial resources. So I started looking at, the US laws governing, Finance and started to understand a [00:03:00] little bit more, some of the reasons why, that is the case. And of course. Almost every country has similar laws, and these laws are, they make investing in your own community, in businesses that you care about, whether it’s in your geographic community or a community of something that you’re really interested in, that’s maybe another place.

it’s very difficult for the regular person to figure out how would I invest in something that I care about? And and in a private business, and so people end up investing on, the public markets. And, that’s where almost all of the money that we have invested is invested. And that really doesn’t benefit these small businesses at all.

Maybe a little bit, but very indirectly. And so I just started really trying to understand this and became fascinated by the possibility of [00:04:00] regular folks being able to invest in things they care about outside of the public markets. And I realized that it actually had already happened to some extent in the US.

There’s a really great story of a ice cream company called Ben and Jerry’s that back in the eighties. Yep. They ended up figuring out a way to legally raise money from residents of the state of Vermont where they were located. Anyone in Vermont was able to invest the minimum investment. I forget it was like $464 or something like that.

And so I just started trying to understand how does this work? How do, how can we make the, how can we make this more common and easier? And so I started, I realized there were laws on the books that made it possible. Although in the US there was no way to do it At the national level. We have over 50 different jurisdictions in the US Yeah, the states, the territories, [00:05:00] Washington DC and so you had to do state by state compliance, and so I ended up as part of Sustainable Economies Law Center, I ended up advocating for a change in the law that did result in a federal, national law that does now make it possible to do it at the national level, but there’s still a long way to go.

So I’ve, that’s been my passion for decades. I’ve helped. many organizations raise money that way, both before and after that law went into effect. So we used to do it at the state level. I’ve done it myself several times, using many different tools. There’s lots of different legal tools in the us but we still have a long way to go to make it more user-friendly and more widespread.

Andy Field: So that, excuse me, that, that sort of, moment when you realize something needed to be done to get access to finance to people who really need it. Would you describe that as what, as the defining moment in your career when you knew this is what you were [00:06:00] gonna be doing now, this is something that really is gonna make a difference.

Jenny Kassan: Looking back it definitely was. I mean it became something that I am so passionate about. I really believe that if we could get more finance into the hands of small businesses, non-public companies, not taking away finance from the big public companies necessarily, but just having some amount of security in what is flowing to those non-public companies in the us. Like our public companies are only, there’s only about 3000 of them and there’s hundreds and hundreds of thousands of small businesses. So it’s very , it’s a very disproportionate amount of funding that is in the public markets and I’d just like to see some level of access. Greater than what we have now. And unfortunately I have been working on this for almost, and we [00:07:00] still have a long way to go.

Andy Field: And I guess it’s that keeps you motivated to, to keep doing it because like you said, there’s lots of progress that’s been made. Definitely. But still a long way to go before you reach that. the term I often use when talking about the crowdfunding industry is utopian land. If you like, there’s a long way to go and you are not gonna, rest until you get there.

Jenny Kassan: Yeah.

Andy Field: Brilliant. Okay, so moving on to the Crowdfunding Professional Association. so first of all, if you could just tell us how you got involved with the association and then perhaps outline some of the current priorities that you have as a body and the main areas of focus at the moment.

Jenny Kassan: Yeah, we did get a big change to the law. I was a co-founder of Sustainable Economies Law Center, which was a nonprofit, and one of the very first things we did back in 2010 was to write a petition to change the law at the federal level. [00:08:00] To allow regular folks to invest in small businesses, with some level of regulation.

And amazingly enough, the president Obama signed the jobs Act into law in 2012, and I was at the signing ceremony and we were so happy it did take another four years for the rules to actually go into effect. So it was four years before anyone could use it. So it started getting used in 2016. And yeah, so I was involved in that law being passed, from the very beginning and then monitoring like, okay, when.

What are the rules gonna look like and what, how is this actually gonna work? And so I was very interested in being a part of an organization that, of people that were also interested in that topic, you know? Yes. what is the future of crowdfunding in the US? Our… the CfPA isn’t just focused on that one law regulation crowdfunding under [00:09:00] the Jobs Act, there’s many different legal pathways to doing crowdfunding in the US, including the ones that I was using before that law passed. there was also another thing that went into effect under that law Regulation A, which we already had, but it got greatly expanded.

We those of us who are part of CfPA are just super interested in investment crowdfunding and we call it investment crowdfunding instead of equity crowdfunding cause some of, some people who do crowdfunding raise money in the form of debt, not equity. So it’s basically anyone who wants to raise money from the crowd regardless of the legal tools they use.

We wanna. make sure that’s working well and that industry is a healthy one. And so I, I’ve been involved in that organization for a while. It’s a wonderful group of people. Very diverse. there’s people like me who are super passionate about small business, like mom and pop, [00:10:00] and then others who are super passionate about opening up investment opportunities in businesses that are on a high growth path are currently private, but may someday go public. That’s not as much my focus or and passion, it’s a big tent and we think that people should have more choice. About where they put their investment dollars.

Andy Field: So that’s what we’re all about as an organization and really important actually to have that mix. I think. I think that’s a really good strategic, strategic plan is to have the people who are all focused and have maybe have slightly different priorities and slightly different wants and needs, but essentially are all collaborating together for the same outcome.

Jenny Kassan: Yeah.

Andy Field: so are there, is there anything right now, what’s the challenge or the, a number of challenges that you are working to solve right now in the US ecosystem?

It is quite a complex ecosystem when you look at it compared to other jurisdictions. And I’ve learned that very quickly over the [00:11:00] last few months, just meeting so many, interesting and powerful people in the industry. But yeah. Anything right now that you’re working to solve.

Jenny Kassan: Yeah, I would say it’s almost more an opportunity than a challenge because, ever since the law went into the new laws went into effect, after 2012, we started to see some issues with the laws, both how they were written and how they were being implemented. Yep. And we had many things that we wished could change. We could get some updates to the regs a few years ago. I think it was in like 2020, 2021. There’s still a lot of challenges and we still see it not thriving the way we hoped it would after it’s been almost 10 years since that law passed or in since regulation crowdfunding went into effect even longer since the law passed.

And so we’ve had this [00:12:00] wishlist of things that we wish would change, and now we do have an administration and a, Congress that is interested in making some reforms. So it’s our, an opportunity that we haven’t had for a while, ever before to in, with the current configuration of our lawmakers is to actually make some change and not just at the, so in, in the US and I’m sure this isn’t uncommon, but we have the laws which the legislature makes and then they get implemented through rulemaking. Yes. And so we have both the actual statute, which has not changed since 2012, and then we have the rules that were adopted by our Securities and Exchange Commission, and we would like to see changes made in the statute because the Securities and Exchange Commission, it’s very easy for them to change regs. We wanna see the [00:13:00] statute be more, friendly and supportive of the industry. and we have an opportunity to make that happen. So we’re putting a lot of effort into really trying to educate the lawmakers and their staffs about the things that are frustrating and maybe not necessary.

Just as one example, if you raise money under regulation crowdfunding, you, no matter, even if you’re a brand new company and you have had no financial activity, you still have to get, financial statements that are, prepared in a special way that usually requires a professional accountant.

And then if you’re raising more than a certain amount, you have to have a CPA. So it’s silly like you, you have to pay all this money for a professional accountant when maybe it doesn’t really make sense. So Sure. Some of the lawmakers don’t even [00:14:00] realize that. Yeah. So we’ve been trying to Educate them about what it’s like to live under the existing, rules and see if we can’t, get some positive changes.

Andy Field: And that’s really interesting because it mimics, two areas in particular. One is that’s happening to a certain extent. I know the UK Crowdfunding Association, lobbying for some similar changes. to be made to some of the, the rules and the regulations around getting access, to even open accounts on, platforms, which is, perhaps they need to be looked at.

Nobody’s saying that we should do away with the regulation. We just need to. keep it, how did we term it? I think we discussed this when we were in LA just to keep it on a level that’s appropriate if you like. And it, and also very similar to, I did a podcast fairly recently with Oliver Gajda, who heads up EuroCrowd.

And essentially EuroCrowd, helped write the European law, which is [00:15:00] fantastic. there is a harmonized set of regulations for members of the EU called ECSPR, and, but they share very similar frustrations to you in that the implementation of those rules and laws have seen things just happen a lot slower than they would like them to happen.

And there’s been some reports actually fairly recently that have come out and we’ve shared some of the content to the GECA community, just talking about why that’s the case and how potentially those challenges could be fixed, if you like. So it’s interesting that we’ve got these sort of, across the globe, we’ve got these sort of parallels that are happening, even though they’re happening in siphons, it’s, it’s this, it’s very similar in different jurisdictions.

So just actually, just moving on to the global opportunity. I know we had a discussion in LA about what GECA were doing and what we’re asking our supporters to support us with really in our mission to, to find this, this notion of genuinely, [00:16:00] borderless crowdfunding.

What does borderless crowdfunding mean to you? How, would you define it and how would you expect it to work? And as part of that, what do you think would be the main barriers to making cross border investment more accessible. you can do it at the minute, but the whole process is very laborious.

I’d be interested to get your views on that.

Jenny Kassan: Yeah, it is really challenging, for example, I’m actually getting ready to launch a crowdfunding campaign for this project I’m working on in Baltimore and I’m doing it on a platform called Small Change. And, I was told, and I have to, I’m a, lawyer, a securities lawyer, and I have to be able to offer that investment opportunity to non-US people is totally legal for any US person to invest in that under our law. Yeah. But what if someone from another country wanted to invest in that? You actually have to check each and every country’s securities laws [00:17:00] to make sure it’s okay. And I was told I, because I haven’t checked, I didn’t know, but I was told by the platform that we can add Canada and Australia.

And I was like, that’s random. So it’s just really frustrating that, We, it’s so onerous and laborious. If we happen to have someone in another country, maybe a relative, maybe people who are happen to be in another country, but absolutely are passionate about the thing that we’re building here. Because it resonates with something that they really care about. and that’s why investors invest, by the way, because it’s not just about them, them making their return. Of course, making return on the investment is important, but people invest. And we know this, there’s been various studies, and findings have come out fairly recently actually talking about the fact that’s what investors do.

They want to invest in something that they’re passionate and they’re interested about. And borders don’t, shouldn’t stop that.

Andy Field: So I take up all what you’re saying. Sorry [00:18:00] to interrupt.

Jenny Kassan: No, yeah, exactly. And, the, the public markets, or I hate, I don’t even wanna call it the public markets. I’m not sure even what to call it, like the financialized professionalized markets for money are borderless, right?

Yeah. if you’re a money manager who manages billions of dollars, you don’t have to worry about that stuff. You put your client’s money wherever you wanna put it, and so it’s really not a very fair or level playing field when, there’s this huge financial, industry and I was. I don’t know if you’ve heard of Rana Foroohar.

She wrote this book called Makers and Takers. It’s unfortunately, it’s already, I can’t bel, I would, I took it off my shelf and it’s already 10 years old. I need to see if there’s an update. It’s a really great book and it talks about how, the [00:19:00] financial industry has become the tail that wags the dog.

So when we, when the market economy or industrialized economy first started, finance was in service to the productive economy. Yeah. The purpose of finance was to help the productive economy. to grease the wheels to, to put the fuel in the engine to allow it to do what it does.

But we’ve now gotten to a point where only, and according to the book, and the book is a little old, I don’t know what the number is now, only 15% of the money that flows through the financial markets actually goes to productive activity. The rest of it is just money flying around this global financial casino, not actually doing anything productive in the economy, like growing a business. Yeah. Allowing real estate to get developed, so it’s [00:20:00] become, as she says, the tail that wags the dog. And, so we, those of us who are not part of that system, because we’re not managing billions and billions of dollars, we’re totally left out of it.

We don’t get any benefit from it. I would love for those of us who want to invest in. Smaller businesses that are not part of that system, which by the way are the, are make up 99.9% of businesses in the world. I would love for us to have some, the freedom to put our money into productive activities, businesses, real estate projects, etc, instead of having to put our money into this global financial system, which really isn’t creating a lot of productive activity and is just basically enriching financiers.

Andy Field: Absolutely. and to have the opportunity to invest in those businesses. It shouldn’t matter where you are in the world, and where the business is in the world. That’s, if you’re passionate about it and if it’s something you’re interested in, you should be able to invest in.

That’s certainly what we [00:21:00] believe as well. And Okay, so that, yeah, that definitely answers my question on how do you know, what does borderless crowdfunding mean to you? It’s exactly what. It means to us as well. And do you think, how do you see this sort of movement evolving? Like we know it’s not gonna happen overnight.

And we’re very clear and we tell all of our supporters, this is something that’s going to take time. There’s going to be changes needed, lots of changes needed in lots of different jurisdictions to make this happen. They don’t necessarily have to be massive changes, but there’ll be, there’ll be a fair few of them.

How do you see things evolving? Do you think it’s, it’s something that we should be, look, it’s certainly not a lost cause. is what we believe and I hope, hopefully you’ll agree.

Jenny Kassan: Yeah. I think ironically, even though we’re talking about a global movement. I feel my belief is that for things to really change, we need to have a global movement of local activism. I feel like the, my [00:22:00] theory of change is that things really do change when we can be face-to-face with each other, maybe in the same room, not necessarily virtual over time, not just meeting. That’s why I’m working on this project in Baltimore, which is the place-based ecosystem to grow people’s comfort level with investment crowdfunding because.

It’s amazing how difficult it is to get someone who’s never done something like that before, invested outside of the public markets on their Schwab account or Fidelity account or whatever, E-Trade account. Two, that’s, those are US things. yeah. You know these platforms where you can just press a button and invest, quote unquote invest in Apple, which by the way, when you invest in Apple, the money does not go to Apple.

It goes to another investor who owned stock in Apple and is selling it to you. So it’s not actually helping Apple at all, except [00:23:00] indirectly. So people are so used to investing that way and there’s all these professionals that tell them that’s how you invest, that we need to get people really comfortable with this other way of doing it.

And I believe that doing it in a place over time. Building trust, building relationships, getting people comfortable with it, helping people learn how to make these decisions about what to invest in and how to evaluate investments. I honestly think that’s what’s gonna move the needle. And it’s overwhelming when you think about it…cause it’s oh my God, that’s gonna take forever, But yeah. Yeah. I’m trying to create this ecosystem in Baltimore, Maryland, which is it, which will be a model that could be replicated throughout. Sure. The country and the world and of, and I know. I know it’s already happening in places all over the world, very much under the radar where people are super [00:24:00] passionate about investing in their own communities.

And, like the UK has, not to go too far off topic, but the UK has some local currencies. that whole local currency thing is a similar idea that, you, that you have money that. Stays local, that stays in your community, that builds wealth in your community. So these movements for localization, ironically…. could create, could be our part of a global movement to allow us to do whatever we want with our money, which sometimes will be to invest in our own community. And sometimes we’ll be to invest across the world because we’re passionate about that thing. Or may, maybe our grandparents came from a certain country and yeah.

You wanna invest in something in that country, there we shouldn’t have limits, but I do believe it, the movement has to be a global movement of local face-to-face activism and getting and education.

Andy Field: So that was gonna be my point. I was literally just [00:25:00] going to move on to that and I was just gonna say.

What you’re saying there sounds to me. So we’ve published our manifesto recently and one of, one of our key pillars is education. And there’s education across the board actually. So it’s to raise awareness of, the industry, it’s education for founders on how best to, set up their business for a crowdfunding campaign, education for platforms on what founders are looking for and education for investors into how they can.

Invest in, in sort of different businesses, in different jurisdiction, in different areas and in different ways as well. So it sounds to me actually, ’cause the next thing I wanted to talk about was, how we could strategically align what GECA are doing and what the Crowdfunding Professional Association are doing.

And education would probably be the first thing, the low hanging fruit, if you like. That, that, that comes to mind because I think we, we would certainly agree that education piece is gonna be huge if we’re to have any kind of catalyst for change. I, that’s where I see the natural alignment between the Crowdfunding Professional Association and GECA.

Would you agree [00:26:00] with that? Is there anything else that you would, you could think that we could maybe align on? To work strategically together.

Jenny Kassan: Absolutely. I think there’s certain principles that apply globally. there’s certain very specific nitpicky things that we’ve been focusing on to change the US law, but there’s other things that are totally, universal, what level of financial, statements have to be prepared and what is a reasonable amount to ask people to prepare? that’s something that’s gonna be universal. Yeah. And how, and then how do you evaluate a financial statement? If you are an investor, how do you decide what to invest in?

So there’s certain things that I think are not country jurisdiction specific that and of course every place we wanna honor every place and their unique context. But again, I think, business is business. If you’re gonna invest in a business, you wanna know What are its [00:27:00] projections?

what are its future expectations? Who’s the team? these are things that we can help people understand regardless of where they are.

Andy Field: Absolutely. And on the investor level, I think some of the things that you talked about that are gonna be the same across the board and perhaps should be the same across the board, helping to harmonize those kind of things makes perfect sense.

That can only help in the sort of global collaboration and the, the, being able to invest across borders. so I guess how do you think we could collaborate to. To influence policy share, best practice. Perhaps we could look at, events either online or in person. Certainly being part of your events and you potentially being part of our events would make perfect sense to me.

What sort of would an impactful partnership look like to you? That, in the sense that obviously we are supporters now of, of your organization and you are, you’ve kindly supporting, GECA, which is fantastic. Yeah. What sort of things do you think we can get involved in?

Jenny Kassan: [00:28:00] I do love the idea of trying to grow this global movement.

I have to admit, as a US attorney, I have been super focused on the US but I think it people all over the globe. Every human being on this planet is affected by our financial system, not necessarily serving. The best interest of most people. Yeah. Yeah. and this is something that applies to everybody on, in the, on the globe.

The financialization of our economy where finance has taken such a big role in our economy is taking away from the productive. activities that could result in good job creation and, good things happening in our communities and small businesses thriving, like this is an issue for everybody in the world.

So I think, starting to have that conversation at a [00:29:00] global level instead of just focusing on our, our own country is exciting because, we can make it into a global movement. Yeah, there’s a, there’s an organization, there, there’s something coming up called the World Localization Day, and that’s a really great model to me.

It’s it’s a global movement of people who care about their own communities. I’ve seen you mention this on LinkedIn actually. Yeah. Yeah. And. We’re interconnected with each other. Like nobody, I don’t think anybody, maybe some people, but most of us don’t wanna go back to a time where we had no connection to people around the world.

It’s such an enriching thing to know what’s happening all over the world and to have friends and colleagues throughout the world. and we also care about our own places and our own communities. So I think building that global movement of people who care about this. And having, maybe speaking with one voice on this desire to [00:30:00] be able to invest in the things we care about, I think could be really powerful.

Andy Field: And that’s actually what GECA, I hope you provide essentially a means to have a talking shop. So you’re quite right. you are quite rightly focused on things that are happening in the US but we have supporters who are very focused on what’s happening in Belgium or what’s happening in Portugal.

And actually to get those heads together, talking and explaining to each other some of the, some of the challenges and some of the positives as well about, about what’s going on in their particular jurisdiction. I think that can really help. and bring people together.

Jenny Kassan: That’s brilliant.

Andy Field: We’re actually, we are very close to running out of time, so I’ve got a couple more quick questions if that’s okay. And the ones I always ask at the end of the, at the end of a podcast, so the first one is, where do you see the industry in five years time? Where would you like to see the industry in five years time?

Jenny Kassan: Oh my gosh. I would love to see more people participating in, community investing. there’s a lot that has to happen. Unfortunately, fewer and fewer people have [00:31:00] assets to invest in the US and again, I’m apologize for being so US focused. No, not at all. A study just came out that 60% of people in the US.

Don’t have a money, enough money to live even to afford even the basic necessities of life. 60%. Yeah. So we are in a time of wealth being concentrated in fewer and fewer hands and the impoverishment of more and more people, which is. Horrific, And so unfortunately, like a lot of people can’t invest in anything.

They don’t have any investments and they can’t make any investments. But for those of us who do have any money to invest, to the extent we have like a retirement account or a, any money that we have invested most of us, to the extent we have money invested, it is in the public markets.

More and more of us getting comfortable with moving some of that money into [00:32:00] private, into crowdfunded investments and it becoming a bigger and bigger movement where people start to see, wow, I can actually do better with my money. Maybe make. Return and again, we could have a whole debate about what’s riskier, what’s less risky.

I think that’s subjective in a lot of ways. But, there are people who invest only in crowdfunding and they do quite well with their returns and they can feel good that their money is actually going into productive, actually, a difference.

Andy Field: Yeah, that makes sense. I think that would be almost if any of us could leave any kind of legacy in the industry, if we could do, if we could help to achieve that kind of, vision, within five years, that would be, fantastic.

I think that’s the same for me as well, actually. that’s brilliant. Thank you very much, Jenny. I just wanted to ask you just to share where any listeners can follow you or CfPA’s work as well. Do you want to just give out that information?

Jenny Kassan: Yeah, so you could [00:33:00] learn more about CfPA @cfpa.org.

We are having our awesome annual event in Washington DC in October, so we invite everyone to come. Even if you’re we, you’re not a US resident, it’ll still be really fun and interesting, so please come. Then in terms of my private work, JennyKassan.com, I have all my private work and information about my book and free resources.

Very US focused, to be honest. But, for those who are interested in US, we have lots of us listeners, so that’s, good. And who knows? It might be interesting to see what we’re struggling with in the US and again, I’m sure there’s tons of like overlap between the things that we all wanna see in our own country’s laws.

Andy Field: No, that’s brilliant. Thank you once again. Jenny, that was absolutely fantastic. Really valuable insight. It’s clear that CfPA and GECA, I think we’re both doing vital [00:34:00] work, you, in the US obviously, and, us on a global level. It’s also clear that I think there’s definitely room for collaboration in the future.

so that just leaves me say thank you. But yeah, thank you so much again. And if you enjoyed today’s episode, please make sure to follow GECA on LinkedIn. Visit the thegeca.org to learn more about our mission, our growing global supporter base and, just how you can get involved. And, thanks as always for listening to the podcast.

Stay tuned for future episodes and we’ll continue exploring the evolving world of crowdfunding and the innovations that are helping to shape its future. Thanks again, Jenny.