My understanding is that SEC Rule 506[1] allows you to have up to 35 "sophisticated" but non-accredited investors. The catch is that you "cannot use general sol

My understanding is that SEC Rule 506[1] allows you to have up to 35 "sophisticated" but non-accredited investors. The catch is that you "cannot use general solicitation or advertising to market the securities" - which means friends and family who you approach directly are fine, but a public crowdfunding campaign is not. The new crowdfunding rules will allow companies to publicly solicit a much larger number of investors, as long as the company is raising <$1 million, and each investor is investing <$10k or 10% of their annual income, whichever is lesser. Disclaimers: This is an oversimplification, the law has been passed but the SEC rules have yet to be written and enacted, IANAL and really don't know what I'm talking about. [1] http://www.sec.gov/answers/rule506.htm http://www.sec.gov/answers/rule506.htm