Some call it equity crowdfunding. Some call it Title III crowdfunding. Now apparently the SEC calls it regulation crowdfunding. Regardless of what it is called, it is finally legal. On Oct. 30, 2015, the SEC issued final rules and forms implementing Title III of the JOBS Act. This comes more than three years after the enactment of the JOBS Act, and more than two years after the SEC was required by Congress to implement final rules legalizing Title III crowdfunding.
Title III of the JOBS Act was intended to be the marriage between the social networking world that we have become, and the traditional and regulated capital-raising world that has existed for many, many years by making it possible for companies seeking capital to reach nonaccredited investors through offerings of equity on the Internet. Plagued by years of disagreement focusing on the implementation of the difficult statutory scheme that Congress handed to the SEC in Title III, as well as concerns about the heightened opportunity for fraud and abuse that Title III potentially brings, the rule-making process was stalled in the SEC for a long time. Not any longer.
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