New Regulations on Crowdfunding

Last night Capital News reached out to us to get our opinion, as a startup, on the new regulations on crowdfunding. A short piece of our opinion was shared through Capital News, so I thought I would expand on our opinion found in their article New crowdfunding regulations bring opportunities for startups.

The new crowdfunding regulations are exciting for startups, primarily because it gives us greater access to funding and expands our investment opportunities. Crowdfunding provides startups with a whole new source of funding, allowing startups to tap into something new, something untouched- which may be exactly what some need to provide them with a quick kickstart. In addition to expanding access to funding, investment opportunities are expanded as well. Through a portal startups are able to connect with investors they may have never had the opportunity to approach, potentially because they simply didn't know of them. Crowdfunding will function to facilitate capital fundraising for startups in terms of access and effort; apparently the documents startups are required to prepare for the investors require a lot less effort than the traditional approach to investment funding.

The only precaution for startups: through a portal you may not have the opportunity to get to know the person investing into your company- and this may be worrisome is they all of a sudden own equity in your company.