Crowdfunding is expanding with changes to investment laws…

Women Invest

This past Friday, just a day shy of Halloween, the SEC finally voted on Title III of the JOBs Act, the “Crowdfunding” provision enabling individuals who do not meet the definition of “accredited investor” to participate as investors in online portals investing in the start-up space. This “democratization” of capital formation will be done through funding portals that will need to register with the SEC and become a member of a national securities association.

Under the rules:

  • A company would be limited to raising a maximum of $1 million in any 12-month period through crowdfunding platforms and would also be required to provide certain financial and business information to the SEC.
  • Individual investors would have annual investment caps based upon their income/net worth.
  • Funding portals would provide the communications channel regarding the company and the investment opportunity as well as handle the transfer of funds.

Although these new rules will not…

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