The Securities and Exchange Commission (SEC) recently announced long-awaited new rules affecting equity crowdfunding. Entrepreneurs have every right to be excited, since these new rules will open up new avenues for raising money starting in the spring of 2016. But they also need to understand that with every new opportunity comes a cost, and this one is no different. What are these new rules and how do they affect your ability to raise money for your business?
In what can be considered a historic day for startups, small businesses and entrepreneurs all across the United States, on November 2, 2015 the Securities and Exchange Committee (SEC) voted 3 to 1 to approve the final rules for debt and equity crowdfunding (aka Regulation Crowdfunding). In about 180 days, tech startups and Main Street businesses will be able to raise up to $1 million from their friends, followers, and community via SEC registered websites. There is a lot you need to know about the new rules.