Guide to Starting and Operating a Small Business | 2018 Guide to Starting and Operating a Small Business - Page 42

Crowd funding was signed into law in April 2012 through the JOBS Act, legislation that opens up the possibility of a pool of small investors while providing fewer restrictions related to securities laws that previously had been a barrier to this kind of funding. Crowd funding is being used in support of a wide variety of activities, including entrepreneur- ship, artists and journalists, for political campaigns, charitable purposes, invention development, scientific research, and more. Various networked platforms for this type of funding can be searched on the internet. Depending on the platform and the defined purpose and use of funds, crowd funding monies may be provided in the form of a loan or they may be donated funds. There are three forms of crowd funding: 1. Donation or Premium: Asking a crowd to donate to your project in exchange for something of value 2. 3. such as a CD, t-shirt, or otherreward. Debt: Asking a crowd to loan money to your business in exchange for financial return and/or interest paid in the future. Equity: Asking a crowd to donate to your business in exchange for an ownership share of your business. Although this form of funding is seen as an attractive alternative for acquiring funds for entrepreneurial ventures, there are still some unresolved issues on how rules governing solicitations and securities will be applied particularly related to equity crowd funding (selling amounts of equity to many investors), as that activity is governed by the Securities and Exchange Commission (SEC). Equity crowd funding remains a complex opportunity as SEC [\™ݙ\[]\H[][ˈX[]]H\]Z]Hܛ[[[ZXY[H]HY\]\H\YB'ZXY[[\[H^[\[۸'H RSJKX[X[\[\\Z\H\][HXX[]“ZXY[\Y[[\[Z\\[Y\ˈ\H\H\X]Y]HY[][ۜݙ\[\\Hق[[[X[X[ۜ\]Y[\܈[][ۜوZ]\HY\[܈]HY[][ۜۈ\]Z]Hܛ[[ˈ܈[ܙH[ܛX][ۈۈRSHΈ˛ZXY[݋\K K LMM ML ̎LMKĽM KB [[^[[\\Hۈܛ[[\Έ8'Hܛ[[Xx'HHZ[\]Z[XH[ܛX]]˘ܛ[[ZY\˘KILܛ[[LXKSTԕSN[[ۙHۜY\[ܛ[[[ܛYH\X\HY[Y\[\Y[Y\[ۜ[[]ܛ^H[ ܈X[[ٚ[[Hٙ\[ۘ[\ۛYXXH[^\Y[Y[ܛ[[܈[ۈ]ܛH\\܈[\\[\[\H[܂ZY[HۈY[][ۜ[\X[KX[[[‘[[[]X [܈ܙY] H\\\\X[Hܛ\Y[\X]YܚY\Έ[X\Y[X\Y X\YX\H[XYHHܜ\&\YHو]\[YXHH\\X]Y][[ˈ[H][وY][ H]\[[H\Y]\ٞHHX H[X\H\\وX\Yܝ ]\B[[[܈\[\ܜ\\N([Y\X[[[[Y\X[[[H\[Y\˂(Xܚ[X[XZ]XH KHH[[X[[]][ۈ\\\8']H\[8'HHX[XZ]X\وB\[\\[Y\H]H[\وHXZ]X\[[]\ݚY\]\[\][˂(KˈX[\[\YZ[\][ۈ АJH8'X\[YY8'H[؝Z[YYH]]H[[[]][ۋHАH\XZH\X[ˊB[[X\Y[\\YۈHܜ\ܙY] ]ܝ[\[\۸&][YHHYHو]\[ [X\Y[\HY\\܈[\[\X[H]HY\[\\]\[X\Y[ˈ^[\\š[YN([ܜYH[Z[HY[X\[ ܈Y[˂(\ۘ[ܙY]\][[ۙ[ ܈\[YHوYH[\[HXY\˂