Understand the Crowdfunding Shift That Could Transform How Startups are FundedA new regulation has the potential to alter the way many startups are funded.
This story appears in theJuly 2016issue of狗万官方.Subscribe »
To most people,crowdfunding意味着有人发明了一个热水瓶,唱“Yankee Doodle," and it just raised $750,000 on Kickstarter. But that's about to change. In May, a regulation called Title III, a part of the Jumpstart Our Business Startups Act, clicked into effect, and it has the potential to alter the way many startups are funded -- and how people use the wordcrowdfunding.
The law itself, commonly known as the JOBS Act, is old news. It was passed in 2012, and part of it went into effect a year later. It initially allowed companies to publicly solicit and raise capital from "accredited investors" -- that is, people who the government determines are wealthy enough to take big investment risks, often meaning they have a net worth of at least $1 million. We're not talking Kickstarter-style funding here, where backers are essentially buying a product ahead of time, or donating in exchange for a token gift. We're talking about true investors getting equity in a company -- a very different kind of crowdfunding, available only to an affluent crowd.
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