Co-founder and Partner, Startup Exemption
Among the impossibilities of our time, getting a bill through the US Congress with bipartisan support is right up there with avoiding spam and lifting a car. But Zak Cassady-Dorion, co-owner of Pure Mountain Olive Oil in Tarrytown, achieved that in just a few months, and the results may change our economy for good.
In 2010, Cassady-Dorion, now 32, was a world-traveling serial entrepreneur who found himself stymied by a classic funding obstacle. When he tried to start a new company with two colleagues in San Francisco, financing was practically impossible to secure from banks and venture capitalists. Their solution: Change a law forbidding startups from selling shares to the masses.
In the past, a new business could not get money from more than 35 unaccredited investors who were not registered (as most are not) with the Securities and Exchange Commission (SEC), nor could they solicit broadly.
“People wanted to protect investors, and that’s extremely important,” Cassady-Dorion says, but some of the protections, he and his colleagues felt, had become cumbersome in a world where a startup’s preferred funding mode was soliciting $5 or $10 donations from a large number of people online.
“We communicate with friends and family online, so that’s how we need to be able to raise money,” he says. He and his colleagues lobbied Congress, and, 18 months later, the Jumpstart Our Business Startups (JOBS) Act became law. “It was amazing,” Cassady-Dorion says. As a result of JOBS, new businesses will soon be able to use an online SEC-registered portal to attract a large number of investors and lenders.
“About ninety percent of people who start businesses get funding from friends, family, [and] their own savings, but sometimes they need more,” says Joy Rosenzweig, associate director of Women’s Enterprise Development Center Inc. (WEDC) in White Plains, a not-for-profit organization that provides entrepreneurial training and support services to local women. By contrast, only 2 percent of businesses get venture capital and other funding from registered investors; even Facebook’s IPO was funded mostly by international investors because of concerns about the SEC. Cassady-Dorion’s work may help change all that.
Says Jason Best, who lobbied with Cassady-Dorion for JOBS and is now principal of the multi-state Crowdfund Capital Advisors, LLC: “Many people think deep thoughts, and some of those are innovative. But only a few people turn those thoughts into actions. Zak is one of the most action-oriented people I have ever met. I just hope that I have the chance to work with him again in the future.”