SEC Dives in Further with Changes to Crowdfunding Regulations

Regulation Crowdfunding was an exciting part of the JOBS Act back in 2012.  The big idea was to open up investing in startups to anyone.    

The SEC dipped its toes into the water, allowing companies to raise up to $1M and investors (including non-accredited investors) to invest between $2,000 and $100,000 per year.  

The program has been a modest success.  Crowdfund Capital Advisors believes that over $500M has been raised using these rules.  Most of this money has been raised by restaurants, media, consumer goods and beverage companies.    

The SEC recently approved changes to (i) increase the maximum raise to $5M, (ii) increase the limits for non-accredited investors and (iii) eliminate the limits for accredited investors.  

We believe that most companies will continue to raise money from accredited investors through the traditional routes.  

But, we acknowledge that the SEC believes the program is working and is making it easier for startups to access cash and for investors to access investment deals.