If you're tired of hearing about how venture capital firms have captured all the early-stage financing for exciting new start-ups, I have some good news for you.
Mom-and-pop crowdfunding for the average person is about to become a reality.
On Mon., May 16, the Securities and Exchange Commission will begin implementing equity crowdfunding nationwide for the average investor. This will allow small companies to directly raise debt or equity capital from friends, family, and interested investors. It's the final piece of landmark legislation called the Jumpstart Our Business Startups Act, popularly known as the JOBS Act, that was passed in 2012.
One of its provisions allows new businesses to raise capital from directly from private investors. Initially, only accredited investors — those with $1 million in net worth or who earn at least $200,000 per year — were allowed to invest in start-ups.