That’s what a friend of mine, an experienced securities attorney, said, when she heard about congressional efforts to expand crowdfunding into the entrepreneurial space.

Crowdfunding offers a unique source of funding to small businesses that are unable to acquire bank loans, access the formal capital markets, or if their business model includes giving the public a piece of the company. With all of its unique benefits, crowdfunding also creates an extremely attractive platform for widespread, small-scale fraud. This fraud typically occurs when investors commit small amounts of money to a project, they are unlikely to want to pay lawyers to pursue fraudsters, and class action lawyers are unlikely to think such cases are worth their while. This also remains true for the State Attorney General and the SEC; they do not have the resources to pursue anything except the most egregious cases.

This is where CrowdCheck is critical. CrowdCheck offers protection against potential fraud and helps investors make good investment decisions. CrowdCheck does the “due diligence” that lets investors (Grandmas included) see the results of this due diligence in an easy-to-understand report. CrowdCheck walks the entrepreneur through the complicated disclosure process so that they know they meet legal requirements and compliance.

CrowdCheck’s founders are business lawyers and entrepreneurs, while our team includes very experienced securities attorneys. Our CEO has been at the forefront of doing the due diligence for companies that want to raise money for almost three decades. Our researchers help guide the entrepreneur through the disclosure and due diligence process, including securities lawyers and skilled investigators. We think the capital markets offer great potential to improve everyone’s financial situation, but only if we all work together to keep the markets’ compliant.