Guide to Regulation Crowdfunding
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What Is Regulation Crowdfunding?
Wefunder Crowdfunder AngelList EquityNet
How Does Regulation Crowdfunding Work?
How much you need to raise How you will use the funds Who your target customers are Why investors should back your company How you are different from your competitors
Pros and Cons of Regulation Crowdfunding
History of Regulation Crowdfunding
Has an earned income of more than $200,000 (or $300,000 together with a spouse) in each of the last two years and reasonably expects to earn the same for the current year, or: Has a net worth over $1 million, either individually or together with a spouse (excluding the value of a primary residence).
What Are the Requirements for Regulation Crowdfunding?
Must be a U.S.-based corporation or LLC Can only sell securities through an SEC-registered intermediary Must provide complete and accurate disclosures to the public for investors to make informed decisions Can raise a maximum is $5 million within a 12-month period Must limit the amount individual non-accredited investors can invest across all crowdfunding offerings in a 12-month period If you are raising more than $1.07 million, you need to have an independent CPA audit your financials for the last two fiscal years or since your business’s inception
Must be at least 18 years of age Must disclose identifying information, as well as net worth and annual income Generally must abide by a holding period of at least 12 months after the campaign closes Non-accredited investors may only invest the greater of $2,200 or 5% of their annual income or net worth if their annual income or net worth is less than $107,000; if their annual income or net worth is greater than $107,000, they may invest up to 10% of their annual income or net worth (whichever is more) An accredited investor taking part in SEC regulation crowdfunding may invest as much as they wish
Regulation Crowdfunding vs Equity Crowdfunding
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