New Crowdfunding Rules for Small Businesses

Linda Jenkins, November 11 2015

businesswoman contemplating crowdfunding campaignThe SEC is paving the way for small businesses to raise capital in exchange for equity through online crowdfunding campaigns. They recently issued a press release in which rules to permit equity crowdfunding and amendments to regional and intrastate proposals were announced. Highlights of these new rules include:

  • Permission for companies to raise up to $1,000,000 in a 12-month period
  • Investors with less than $100,000 in income or net worth can invest $2,000 (or 5% of the lesser of their income or net worth)
  • Forms enabling funding portals to register with the Commission will be effective Jan. 29, 2016

You can read the full announcement here: SEC Adopts Rules to Permit Crowdfunding

According to Mary Jo White, SEC chair:

"There is a great deal of enthusiasm in the marketplace for crowdfunding, and I believe these rules and proposed amendments provide smaller companies with innovative ways to raise capital and give investors the protections they need. With these rules, the Commission has completed all of the major rulemaking mandated under the JOBS Act."

 

Top image courtesy freedigitalphotos & imagerymajestic 

 

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