CrowdFunding For For-Profit BusinessesDec 15, 2011 14:16 EST
The US Congress is considering the approval of new legislation that would allow startups to raise up to $2M in funding using crowdfunding platforms. This would enable entrepreneurs to raise money among the general public and offer equity in exchange. As of this time, entrepreneurs cannot offer equity when crowdfunding.
Raising money as an entrepreneur has never been easy and average income citizens (beyond family, friends and employees) do not usually have access to early investment in startups since they do not qualify based on SEC fundraising guidelines.
A new law, passed in The House, would make it legal for early-stage companies to raise money in exchange for equity using crowdfunding platforms such as Kickstarter.com and HelpersUnite.com.
The bill is currently in The Senate where alternate versions of the original bill are being considered. The Obama Administration has expressed support of The House approved bill.
This article by Forbes provides a complete review.