Let's Finally Fix Crowdfunding!

On April 5, 2012, President Obama signed into law the landmark Jumpstart Our Business Startups Act (JOBS Act), for the purpose of encouraging the funding of startups and small businesses throughout the United States. Title III of the JOBS Act, otherwise known as Regulation Crowdfunding or Reg CF, received the most attention because it legalized investment crowdfunding. The purpose of Reg CF was to make it easier for startups and small businesses to access capital, to give more people the ability to participate in investment opportunities, and ultimately, to create jobs and stimulate economic growth.

Crowdfunding is the practice of funding a business by raising small amounts of money from a large number of investors, typically via the Internet. Prior to Reg CF, generally only accredited investors – those who earn an annual income of at least $200,000 (or $300,000 if married), or those with a net worth of at least $1 million (excluding one's primary residence) – could