SEC Issues Final Crowdfunding Rules

On October 30, 2015 the Securities and Exchange Commission (the "SEC") issued final rules¹ that will allow private issuers to utilize innovative new "crowdfunding" techniques for offering and selling securities. The long-awaited Regulation Crowdfunding ("Reg. C") implements key provisions of the Jumpstart Our Business Startups Act² (the "JOBS Act"), and includes many of the proposed rules that were submitted for public comment in October 2013.³

Background

As part of the JOBS Act, the United States Congress sought to establish new avenues for startups and small businesses to raise capital, including new provisions that would allow qualifying companies to conduct "crowdfunding" securities offerings via the Internet. Crowdfunding is an innovative new means of capital generation in which small-scale investment opportunities are made available to the public at large (i.e., the "crowd") through internet-based platforms.