Recapping the day's news and newsmakers through the lens of CNBC.
New rules proposed by the Securities and Exchange Commission today would allow "crowdfunding" of new companies. The concept, which was given the legal go-ahead under last year's JOBS Act, could change the whole concept of start-up company financing.
No more will entrepreneurs have to go hat in hand to a few large financial institutions and venture capital firms that act as the gatekeepers of capital. They would be able to sell equity stakes online to a potential pool of millions of investors. In practice, many observers are worried about scam artists and fraudsters taking advantage of the new rules, so the SEC has been wrestling with how to allow the new funding practice without encouraging fraud—and that struggle runs to more than 500 pages in its crowdfunding release.
What is crowdfunding? Here you go.
"There is a great deal of excitement in the marketplace about the crowdfunding exemption."—SEC Chairwoman Mary Jo White