In the works since June but now released last week from the SEC, makes equity crowdfunding a reality for U.S. small businesses. To date, only accredited investors could invest in equity positions of these companies. Non-accredited investors will now be able to invest $2,000 or 5% of their annual income, in a 12 month period. Additionally, non-acc investors will be limited to $100,000 of securities through crowdfunding.
A maximum of $1,000,000 in a 12 month period limits these small companies but does open up to a larger investment base. The new SEC rules also remove the audit requirement that was originally enacted. That past requirement often added $25-$50 k in upfront cost to raise funds.
We believe that this one provision alone could become the very life-blood to the already expanding url/domain industry. Domain owners and developers will no longer need to sell their domain assets to raise working capital. They could now incorporate around a portfolio of domains/websites, and sell an equity position in that asset, while still continuing to hold a majority ownership position.
The new ruling is part of the SEC JOBS Act, a law designed to make it easier for startups and small businesses to raise capital from a wide range of potential investors. This new ruling will go into effect May 16, 2016!