What does the new SEC rules mean for Crowdfunding in the States?
New Crowdfunding Rules
New crowdfunding rules taking effect on Monday will let anyone invest in startups, where startups raising money through online crowdfunding portals will be able to sell shares to people regardless of their wealth or income so long as the founders have submitted annual financial reports to the Securities and Exchange Commission (SEC). In exchange, companies can raise up to US$1 million.
This overrides the previous SEC requirement that investors backing private companies be “accredited,” with income of at least $200,000 a year and have a net worth of $1 million or more (excluding their home).
What does this mean for US Crowdfunding?
Startups may still be hesitant to take up the new funding option due to the costs to register and submitting the annual results to be too high, considering the US$1 million limit that appears to be rather low. However, the move may be appealing for existing crowdfunding platforms and new incumbents to add equity investing to their offering.
VALON can be your resource and business partner in Asia. Should you wish to receive more detailed information on VALON, please do not hesitate to contact us at firstname.lastname@example.org.
Disclaimer: This publication does not provide financial, legal or tax or advice of any kind, and VALON cannot guarantee that the information is accurate, complete or up-to-date. While we intend to make every attempt to keep the information in this publication current, VALON make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained herein. Nothing on this publication should be used as a substitute for the advice of a third party. VALON assumes no responsibility to any person who relies on information contained herein and disclaim all liability in respect to such information. You should not act upon information in this publication without seeking professional advice.