The JOBS Act of 2012 legalized three different variations of investment crowdfunding. Title III or Reg CF, allows for anyone to invest in smaller companies that are raising up to $1 million. Title IV, or Reg A+, allows issuers to raise up to $50 million from both accredited and non-accredited investors but requires a higher degree of disclosure and ongoing reporting. Title II updated existing Reg D rules to allow for “general solicitation” (SEC-speak for advertising) ushering in the first iteration of raising capital online or accredited crowdfunding. Under Reg D 506(c) only accredited investors may participate in the offer but allows an unlimited amount of capital to be raised. This is the most popular vehicle to raise money for private companies and a huge market at around $1 trillion a year. Under Reg D 506(c), platforms must verify investors qualify as accredited investors thus creating an additional hurdle for issuers. VerifyInvestor, a company that provides accredited investor verification has crafted a short video that quickly and simply explains Title II accredited crowdfunding. The video is embedded below.
You may also like...
- Verification of International Accredited Investors: What You Need to Do
- SEC Fact Sheet on General Solicitation Under Title II of the JOBS Act
- How To Blow Your Reg D Offering: General Solicitation
- Rule 506, Reg D: Two Ways to Conform with SEC Exemption Law
- Indiegogo CEO David Mandelbrot Shares Insight into Equity Crowdfunding Push: “We Have a Lot of Exciting Things Planned for 2017”
- Report: Title II Crowdfunding Data on Three Year Anniversary Tops $1.47 Billion
- Crowdfunding VC: Nin Desai Focuses on Investing in Tech
- Crowdfunding: A Look at 2015 & Beyond!
- Everything You Need to Know About Accredited Investor Verification
- Patch of Land: We are Leading the Way for 506(c) Filings
- This Presentation Shows How Huge the Reg D Private Placement Market is in the US
- Staying Compliant with 506c Private Placements (Infographic)
- General Solicitation for Private Placements is One Year Old Today (Infographic)
- Registry of Accredited Investors Shares Data on 506(c) Filings
- Perspective: Encourage Affordable Housing through “Community Investor” Crowdfunding Rules