Crowdfunding

Crowdfunding Planning & Regulatory Compliance.

Crowdfunding is a way to raise small amounts of capital from large numbers of people.

In the past, businesses raising money through crowdfunding were allowed only to accept donations or offer premiums, small gifts, or to pre-sell product in exchange for money paid to them by investors. The business was prohibited from offering ownership equity in exchange for investment, however, as it violated SEC rules on public offerings.

That old rule is about to change!

Last year, the President signed into law the JOBS Act, which raised the bar prohibiting small public offerings in exchange for ownership. The details of how the law will be enacted are being hammered out by the Securities and Exchange Commission (SEC), but we already know this law will be a game-changer for small businesses looking to raise less than $1 million in investment capital.

If the SEC announces its new rules early this year, as expected, crowdfunding of venture capital could exceed more than $1 billion in 2013.

So, while the exact date is unknown when this means of equity fundraising will become available, what we do know is businesses interested in leveraging crowdfunding as venture capital will have to be properly organized and will have to comply with SEC rules to qualify. Businesses are advised to start crowdfunding planning now!

To learn what it will take for your business to gain access to these funds, you need to work with an experienced business attorney.

Talk to the Atlanta Business Attorney to see whether crowdfunding is the right move for your small business.

READ MORE: Crowdfunding Whitepaper—Crowdfunding–The Next Evolution of Small Business Finance