In May, the final “crowdfunding” rule of the U.S. Securities and Exchange Commission (SEC) went into effect, making it possible for entrepreneurs across the country to raise small-dollar investments from ordinary Americans.
This new rule is a result of the Jumpstart Our Business Startups (JOBS) Act. When President Obama signed the bipartisan JOBS Act, he said this about the law’s crowdfunding provision:
“This bill is a potential game changer. Right now, you can only turn to a limited group of investors — including banks and wealthy individuals — to get funding…Because of this bill, start-ups and small business will now have access to a big, new pool of potential investors — namely, the American people. For the first time, ordinary Americans will be able to go online and invest in entrepreneurs that they believe in.”
With this new SEC rule, entrepreneurs can now raise up to $1 million from regular investors annually through regulated online platforms. This is a potential game changer for many kinds of entrepreneurs—from the tech company founder bringing her new innovation to global markets, to the Main Street small business owner opening a new store in his local community.
“Crowdfunding has the potential to become the 21st century equivalent of barn-raising”[…]
The full and original article can be viewed on Locavesting.com
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