Guest Blog Post by Kristen Gluch, Director of Content Development for USEED Historically, investing in the next Uber or Slack has been reserved for Accredited Investors – people who earn $200,000 annually (or $300,000 if married) or who have a net worth of at least $1 million. There is an estimated 8.7 million Accredited Investors in the United States today – less than three percent of the country’s population. But the game is changing. Equity crowdfunding is more accessible than ever, thanks to Title III of the JOBS Act, otherwise known as Regulation Crowdfunding, which became official on May 16. For startups, this means opening up a pool of over 300 million potential investors. That’s right – every American can be a startup investor. As opposed to 2.7%, startups can now engage 100% of the US population. So, instead of simply receiving “perks” or “rewards” in exchange for a donation to a crowdfunding campaign, “backers” can now receive securities. They can own actual equity in the company – not just a product of it. With this newfound freedom to raise funding across state lines without prior approval from theSEC, there are, of course, regulations and rules with which a company must comply in order to take advantage of the new opportunity. Here are the basics: The company must cap their equity crowdfunding at $1 million in a 12-month rolling period. The company must be a United States entity. The company must use a broker-dealer or an SEC and FINRA-approved and regulated…
Read More: Equity Crowdfunding is Here: How Title III of the JOBS Act Works
