The stage is being set in Congress and the White House for a new era of capital-raising for small and micro-cap companies in the name of job creation. However, investors beware!
In late October, the House of Representatives passed several bills with a largely bi-partisan vote that would lower the barriers to crowdfunding for the smallest companies by establishing an exemption from Securities and Exchange Commission registration requirements for firms raising less than $1 million with individual investments limited to $10,000 or 10 percent of an investor’s annual income. The concept of crowdfunding has its origins in the music and film industries going back a decade when the Internet was used to attract individuals to back specific projects.
