As the SEC prepares to finalize rules governing what companies must do qualify equity private placement offerings for sale to unaccredited investors under Title III of the JOBS Act, more and more would-be players in the nascent “equity crowdfunding” market are coming around to the view that statutory deal costs may prevent it from ever becoming a viable channel for raising significant capital. The SEC, in its own analysis of expected costs of raising capital via Title III sanctioned public or retail crowdfunding included in the 585-page Title III rule proposal released last October, suggested that fixed costs of accounting audits, legal work and offering commissions could consume up to 39% of proceeds from crowdfunding raises of less than $100,000, and up to 15% of raises between $100,000 and $1 million. Crowd Capital Associates, a Berkeley, Calif., research group founded by crowdfunding evangelist Sherwood Neiss, estimates that Title III equity offerings of $100,000 to $1 million, the annual statutory limit for companies, will spend between 10% and 40% of their proceeds on deal costs and compliance. Those costs include ongoing annual audits for companies raising $500,000 or more that could eat up 25% of the proceeds of a $500,000 offering. Which may mean entrepreneurs will need to crowdfund the deal costs of a crowdfunding round before they can actually raise money for their businesses.