Winter 2015/2016 - The Innovation Highway Newsletter | Page 7

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DECEMBER 2015 – JANUARY 2016

CURRENT CROWDFUNDING NEWS
Article by Jonathan Ortmans

to “accredited investors” – individuals worth $1
million or earning more than $200,000 a year.

The U.S. Securities and Exchange Commission
(SEC) finalized last week the rules guiding how
startups can sell equity. What are the details and
what is next after these new guidelines become
active on Jan. 29, 2016?

The new rules on crowdfunding allow anyone
with a net worth less than $100,000 to invest up to
$2,000 (or 5 percent of their net worth, whichever
is greater) over a 12-month period. If an investor
has an income and net worth greater than
$100,000, they can invest up to 10 percent of their
net worth. The new rules will be effective Jan. 29,
2016.

While the 2012 Jumpstart Our Businesses Act
(JOBS) Act opened the doors for the public atlarge to invest part of their income in tech startups,
since then the nation has had to wait patiently for
the SEC to define and approve the rules setting
limitations on who could invest and how much.

To date, willing crowdfunding investors have been
lured as startup backers merely by the possibility
of receiving a token item in return – such as a
sample of the innovative product, or even just a Tshirt (Read full article).

After healthy debate, the SEC has removed the
provision that new businesses can only sell equity

2016 Global
Entrepreneurship
Index
Now Available
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