Crowdfunding Act: What could it mean for the Entrepreneur or Startup?

The Crowdfund Act is an amended version of the JOBS ACT that will permit the SEC to allow for certain types of investments by individuals who don’t normally qualify as qualified investors under the SEC to make investments through SEC Approved websites. The Act has successfully passed both the House and the Senate. There is a long road ahead for actually enacting the bill but its allowances could be huge for Entrepreneurs and Startups.

In short, the bill will allow entrepreneurs to raise up to one million ($1,000,000) dollars per year through a special SEC registration for crowdfunding. This means that a regular person who normally doesn’t qualify as an Angel Investor will have the opportunity to invest in private entities. Investors who have an annual income of less than $100,000 will be able to invest up to $2,000 or 5% of their income. Investors who have income of more than $100,000 will be able to invest up to $100,000 or 10% of their income.

Stay tuned for more updates.

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