Crowdfunding Brings Venture Capitalism to the Masses

Nearly $1.5 billion was raised for over a million different campaigns around the world last year by 452 different crowdfunding sites, according to a recent industry report from research firm Massolution. That number is expected to grow exponentially once US regulators approve a recently-passed law that allows regular people to buy stock in a startup company using crowdfunding.

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.

Read full article »

Image: Hand Holding Globe from