SEC allows collecting money from crowdfunding investorsStaff writer ▼ | October 30, 2015
The Securities and Exchange Commission (SEC) approved new rules that will allow start-up companies to more easily raise money from investors using ne technologies such as online crowdfunding sites.
New technologies To allow start-up companies to more easily raise money
The Title III equity crowdfunding ruling that was approved Friday will allow non-accredited (mom and pop) investors to invest in crowdfunding offerings subject to certain limits and rules set by the SEC.
Sstartups will only be allowed to raise $1 million in any 12-month period through crowdfunding, and the companies, in an effort at transparency, must agree to provide certain information including a financial statement reviewed by an independent accountant.
Investors will be limited to how much they can invest based on their income. And individual investors will be limited to purchasing a maximum of $100,000 in securities per year through crowdfunding deals, according to the SEC.
The crowdfunding sites will have to be registered with both the SEC and securities industry regulator FINRA. ■