Since the JOBS Act was signed by President Obama in 2012, advocates have been urging Congress to increase the overall limit of $1 million (now $1.07 million, after adjustment for inflation) to $5 million for offerings under Title III (aka Regulation Crowdfunding). But for many issuers, the overall limit is less important than the per-investor limits.
The maximum an investor can invest in all Title III offerings during any period of 12 months is:
• If the investor’s annual income or net worth is less than $107,000, she may invest the greater of:
◦ $2,200; or
◦ 5% of the lesser of her annual income or net worth.
• If the investor’s annual income and net worth are both at least $107,000, she can invest the lesser of:
◦ $107,000; or
◦ 10% of the lesser of her annual income or net worth.
These limits apply to everyone, including “accredited investors” (wealthy, high net worth individuals). They’re adjusted periodically by the SEC based on inflation.
These limits make Title III much less attractive than it should be relative to Title II, the JOBS Act provision for accredited investor crowdfunding under Regulation D. […]
The post Regulation Crowdfunding’s Investor Limits Are The Real Problem appeared first on Locavesting.
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