Part of the Jumpstart Our Business Startups, or JOBS, Act of 2012 made it possible for the little guy to get a chance to put money into a startup. That’s the charitable interpretation, anyway: Many critics of the legislation worried that it may allow some businesses to take advantage of small investors who don’t know the ropes.
Regulators are worried too: The Securities and Exchange Commission is watching about 200 websites out of more than 9,000 that are set to make use of the changes in selling shares of small companies that were part of the legislation. They’re concerned that loosened regulations combined with the reach of the Internet could potentially circumvent protections for investors and even open a door for criminals.
In the past, investing in startups has been restricted to so-called accredited investors, or people with relatively high net worth.
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