5 ms·
Crowd funding projects by selling equity? Have we re-invented pre-regulated-to-death stock markets?
by tryptophan 3y ago
Crowd funding projects by selling equity?
Have we re-invented pre-regulated-to-death stock markets?
- _delirium 3y agoSort of, but only for relatively small amounts of money, to try to avoid the kinds of outrage-producing stories of grandma losing her life savings to a snake-oil investment that led to the regulations in the first place. Regulation Crowdfunding, passed by Congress in 2016, added an exception to the 1933 ban on selling unregistered securities to the general public. Companies may now do so, but with two limits. The company may raise no more than $5m total in a 12-month period through this route. And individual investors are limited to investing no more than 5-10% of their income or net worth, across all crowdfunded companies they invest in, also in a 12-month period (5% for lower incomes and net worths, and 10% for higher). The details on the 5-10% of income or net worth formula are here: https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins/updated-11 https://www.investor.gov/introduction-investing/general-reso...