The SEC Hands Out a Halloween Treat to Crowdfunding Supporters

17 November 2015
View Client Update

Key takeaways

  • The SEC adopted final Regulation Crowdfunding without too many significant changes from the proposal. The first offerings should occur sometime this coming summer based on the effective date.
  • Anyone may invest in a crowdfunding offering, but there are strict caps on the total amount they can invest. Generally, an investor can only invest up to around 10% of their annual income or net worth, whichever is lower.
  • Issuers, which can include most US companies but not non-US entities and funds, may only raise up to $1 million total in a twelve-month period.
  • Intermediaries include both registered broker-dealers and the newly-created “funding portals,” and may, under the final rules, receive an ownership interest in the issuer under limited circumstances.