CARTOONS BY CHRIS BRITT

– EQUITY CROWDFUNDING –
Congress passed a law which is considered the holy grail of crowdfunding. Known as the
Jumpstart Our Business Startups Act (or JOBS Act), the legislation has introduced equity
crowdfunding as a new way for startups to raise capital from non-accredited investors
to start their business.
The law is intended
to encourage funding
for small businesses
by easing security
regulations that have
stifled startups in the past.
By providing easier access
to funding, it’s hoped that
this form of crowdfunding
will create more jobs,
boost the economy and
benefit entrepreneurs,
small businesses and
investors.
Life is about choices and options. Some we regret,
some we’re proud of. Some will haunt us forever.
Before the law
was passed, the opportunity to invest in privately held businesses was limited by law
to accredited investors only — individuals with a liquid net worth of at least $1
million or an annual income of at least $200,000. While there are some 8.6 million
accredited investors in the United States, only 3% invest in small businesses. With the
new law, anyone can invest up to $2,000 or 5% of their annual income, whichever
is less. Companies can raise as much as $1 million via equity crowdfunding. Equity
crowdfunding has shown substantial growth since the passage of the JOBS Act and is
expected to surpass venture capital in 2016.
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