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View Full Version : When Will Crowdfunding be legal in the United States (Equity Funding)?



Bobby76
07-14-2012, 11:37 AM
Kickstarter certainly is doing well. It's really helping many excellent ideas get off the ground. Just imagine how much money will be generated for projects once it's legal in the US to take investments. Sure it's fun to donate to a cause for a bit of a reward like Kickstarter offers, but imagine if you could have equity stakes in some of these projects. I bet many would raise the full amount they are seeking within minutes or hours once Equity is involved. Does anyone know an approximate time frame for the legalization of Equity crowdfunding in the US?

Bobby

Fundordie
07-14-2012, 04:09 PM
I believe the law was passed in April of this year. The SEC has up to 270 days to refine their regulations and figure out how they will manage everything from a regulatory body standpoint. This means we should be able to start investing cash into these crowd funded projects by the end of 2012 at the latest.

Lelocks Trent
07-15-2012, 09:30 AM
Actually the deadline is sometime in January of 2013 for the SEC to get all their ducks in a row. We will likely see a surge of start ups related to crowdfunding int he months prior, and just because the deadline is in January doesn't mean we won't have the SEC finish prior to that time.

SocialCam
07-15-2012, 10:03 AM
Looks like if you are an accredited investor you can begin right away:

The SEC has nine months to prepare implementing rules; so, equity crowdfunding will not really take off until 2013. But companies can still work with intermediaries that are registered broker/dealers or have headquarters outside the United States. Around the beginning of July, intermediaries based in the United States that are not broker/dealers can begin accepting crowdfunding requests but can only accept money from "accredited" investors, per existing regulations.

To qualify as an accredited investor, an individual must have a net worth in excess of $1 million, excluding the value of a primary residence, or a minimum annual income of $200,000 ($300,000 for a couple) for each of the past two years, plus a reasonable expectation of the current year's income at least matching that level. The new rules state that no more than 500 investors in a crowdfunded business may be non=accredited investors.

SocialCam
02-06-2013, 05:52 PM
Well, we were off on some of our predictions I see. 6 Months ago it seemed as if we may have legal equity funding in the US by now, however the SEc has really delayed things. I would estimate that we should have regulations in play sometime around August of this year. Just a prediction. In the meantime there are several platforms which allow equity investments, but you need to have $1 million + in assets to participate which rules out most of us :)