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Equity Crowdfunding
Posted on 15th June 2012 By syed


  • On April 5th, 2012, President Obama signed the JOBS act into law which aims at easing securities regulations to help encourage the financing of small business ventures in the United States.


  • Currently legal in the UK
  • Legal in all 50 states after SEC regulations are finalized


  • To help small business and startups quickly raise the capital they need
  • Encourage and foster entrepreneurial growth


  • SEC regulations are due to be out on or before December 30th, 2012
  • Starting July 5th, 2012, businesses can raise up to $1,000,000 through equity crowdfunding but only through accredited investors (over $100,000 annual income) and with absolutely no solicitation
  • Starting in early 2013, companies can start raising capital from all investor tiers through solicitation, in exchange for equity stakes.


  • Individual entrepreneurs and small businesses can raise capital
  • Individual Investors comprising of ordinary individuals will receive an equity portion most likely in the form of shares in exchange for the capital


  • Entities raising capital can raise $1,000,000 over a 12 month period through a growing number of online portals such as PeoplesVC, CrowdCube, EarlyShares, etc.
  • Investment guidelines so far are:
  • Individuals earning up to $40,000 a year and a net worth of less than $100,000 will be able to invest up to $2000 annually
  • Investors who earn between $40,000 and $100,000 and a net worth of less than $100,000 can invest up to 5% of their annual income.
  • Above $100,000, Individuals can invest up to 10% of their income and are considered to be accredited

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