Startup City Magazine

Equity Based Crowdfunding : Soon in America

The JOBS Act which was passed into law by the U.S. last April is nothing but another way for entrepreneurs to raise cash. Thus apart from angel investors and venture capitalists, a share in startup businesses can also be owned by non accredited investors. Startups in America now get an additional platform in order to raise money with the legalizing of non accredited investors owning a share in startup businesses.

Though the Act has been passed this April, the option will be made effective from January 2013 onwards. The new funding mechanisms will soon be tapped by various numbers of startups waiting to utilize the new source.

There are more than 500 crowd funding platforms that have sprung in the city and they now wait in hope of direct ownerships in the firms they are giving money to.

A survey had been conducted by an equity based crowdfunding site, called EarlyShares. It revealed that one third of the startups in the U.S prefer to use the most visible platforms. Another one third on the other hand seeks platforms that are industry specific.

 Efforts are also being made to legalize non accredited investors in Canada with the group called i-Canada Alliance working towards this  new initiative. With the petition made, an open letter already sent to the ministry of industry and discussions held with security regulators and politicians from across the country, the group has been working hard towards making legal crowdfunding based on equity in Canada. The topic will be focused on by the Technicity Event of the IT world in Canada. The event will take place on the 29th of November in Toronto.

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