Crowdfunding is a relatively new means through which businesses
or individuals can harness the reaches of the internet to raise
capital by seeking small individual contributions from a large
number of people. Crowdfunding has been utilized to fund clothing
start-ups and artistic endeavors, and even President Barack
Obama's 2008 presidential campaign, whereby President Obama
raised over $200 million in singular donations under $200.1 Typical
crowdfunding transactions have generally involved financing a
particular project in expectation of receiving a tangible reward
relating to such project — a music album, for example.
Crowdfunding has generally not involved the offer to share in
the profits generated from the activities financed through such
crowdfunding. This model of crowdfunding, referred to as the
"equity model," would likely trigger the application of
federal securities laws as it would likely involve the offer and
sale of securities to the public. Absent an
