Today, most startups raise capital without going through the costly and time-consuming process of registration with the SEC via "Regulation D", which focuses on offering securities (such as equity) from "accredited investors." This process has come under fire from startups in need of capital who want to be able to raise money from different sources. Recently, bills which allow "crowdfunding" (loosely defined as raising small amounts of money from large numbers of people) as an exemption from SEC registration have been debated by Congress. This article calls attention to another potential change to the federal securities exemptions, which just passed the House of Representatives. The impact of the recently passed change is unclear, but it potentially opens another option for emerging companies in need of capital.
- Summary by FizzLaw Team
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Something Bigger Than Crowdfunding On the Horizon?