Equity Crowdfunding: 3 Facts Entrepreneurs Should Know
Friday, March 21, 2014
Equity crowdfunding has become a hot topic on the startup scene in recent years. The Jumpstart Our Business Startups (JOBS) Act, which was signed into law in 2012, brought significant changes to certainSecurities and ExchangeCommission regulations and made it easier than ever for an emerging business to raise private capital.
With these regulatory changes, the doors of opportunity have been opened for both entrepreneurs and investors, but it doesn’t mean that everything about equity crowdfunding is clear-cut.
“Although the JOBS Act liberalized some regulations with respect to raising capital, we’re still talking about securities laws here, and securities laws are complicated,” said Chris Tyrrell, CEO and founding member of investment platform OfferBoard. “The results of noncompliance can be disastrous for a business, and take years and a lot of money to recover from.”