One year ago, President Obama signed the Jumpstart Our Business Startups Act into law. So, why isn’t “equity crowdfunding” a reality for startups and regular people who want to support them, in the U.S.?
For the unfamiliar, equity crowdfunding–under the JOBS Act–allows startups and small businesses to raise up to $1 million in equity funding online, through sites registered with the U.S. Securities and Exchange Commission.
Broader access to capital could help entrepreneurs when loans aren’t favorable, or they lack connections to deep-pocketed angel and venture investors.
Over the past year, regulators expressed concerns about crowdfunding, namely that “unsophisticated” investors might not understand the risks associated with investing in startups and would be vulnerable to new forms of fraud. Former SEC Chairwoman Mary Schapiro delayed issuance of the rules around it, at the urging of lobbyists.
Read More at WSJ.com