Are there any crowd funding options for tech start-ups not tied to just supporting projects?
The U.S. Securities and Exchange Commission has very strict rules about who can raise investment funds for privately held businesses, and how they are allowed to go about doing it. At the moment, this is primarily limited to raising money from very rich people who qualify as Accredited Investors, and with whom you already have a pre-existing relationship.
Much of this is about to change in the very near future, since Congress passed, and the President signed into law, the JOBS Act of 2012, which for the first time will specifically allow websites (known as “platforms”) both to sell investments to Accredited Investors, and to authorize a completely new thing called “equity crowdfunding for non-Accredited Investors”. However, the first of these will likely not become legal at least until the beginning of 2013, and the true low-end equity crowdfunding will not likely see its rules enacted until late 2013.
So in the meantime, while there are a very few sites (such as CircleUp for Accredited Investors, and Bolstr for non-Accrediteds) that have begun to gingerly start operations under existing laws, I’m afraid it’s likely to be several months before crowdfunding truly gets going.
*original post can be found on Quora @ http://www.quora.com/David-S-Rose/answers *
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This article is intended for informational purposes only, and doesn't constitute tax, accounting, or legal advice. Everyone's situation is different! For advice in light of your unique circumstances, consult a tax advisor, accountant, or lawyer.