This kind of equity-based funding is currently restricted to accredited investors, such as venture capitalists. Small businesses will soon be allowed to raise up to $1 million in any 12 month period from up to 10,000 individual investors without filing an expensive public stock offering.
US President Barack Obama touted the new law as a “game-changer” that will spur economic growth by radically expanding the availability of startup capital. But critics warn that it could lead to harmful fraud, loss and litigation.
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