Crowdfunding is the biggest buzzword in raising capital since the Jumpstart Our Business Startups Act of 2012 (JOBS Act) was enacted. The word crowdfunding is synonymous with advertising for investors, which under the JOBS Act is allowed. Crowdfunding was permitted prior to the enactment of the JOBS Act but only for not-for-profit ventures; for-profit companies could not advertise for investors unless they had an approved intrastate offering.
In the simplest sense, crowdfunding is a method of raising capital from a large number investors, typically via the internet. Crowdfunding falls into one of three categories: Regulation D, Rule 506(c), Regulation A+ and Regulation CF.
Download the full copy of this white paper.