Crowdfunding is one way for some new, ground-floor startups to find investors, and the cash they need to get off the ground.
Thing is, crowdrunding has been restricted to accredited investors that have a net worth of $1 million, or an annual income of $200,000.
At least, that was the rule up until yesterday…
Here’s what happened: the SEC approved a rule change for III of the JOBS Act, making it possible for organizations to raise up to $1 million annually through crowdfunding, without having to put it through the Securities Exchange Commission.
The point of this was to allow non-accredited investors the same investing opportunities as companies with a higher net-worth.
Once the rule takes effect, anyone can invest in startups through crowdfunding. Title III will allow access to a vastly larger amount of investors.
Basically, this makes a new asset class that has nothing to do with the stock market, effectively opening a huge window of opportunity for massive profit in other areas.
More opportunities for more people — seems like a good choice overall.
But although there are more opportunities in theory, there are still limits.
For example, under Title III, individual investments are limited to 5 or 10 percent of the investors gross annual income, based on their net-worth.
Also, investment opportunities are capped at $1 million total per year. For an industry like real estate, limits like that could be a hindrance.
And while there have been talks of raising the cap to $5 million, it’s way too early to tell what the final decision will be regarding that particular issue. Small businesses and startup companies often do not require a vast amount of money to keep their profits on the rise, so that $1 million limit will be plenty of capital for them.
As it stands now, the Title III is set to take effect near the end of this coming January.
I’m currently penning a new Energy & Capital report that will explain what this new ruling means for you, and how you can take advantage crowdfunding going forward. If you’re not already a subscriber, I strongly recommend you sign up in the box below to ensure you receive this report, which will be available to you absolutely free of charge.
To continue reading…
Until next time,
A true insider in the technology and energy markets, Keith’s research has helped everyday investors capitalize from the rapid adoption of new technology trends and energy transitions. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital, as well as the investment director of Angel Publishing’s Energy Investor and Technology and Opportunity.
For nearly two decades, Keith has been providing in-depth coverage of the hottest investment trends before they go mainstream — from the shale oil and gas boom in the United States to the red-hot EV revolution currently underway. Keith and his readers have banked hundreds of winning trades on the 5G rollout and on key advancements in robotics and AI technology.
Keith’s keen trading acumen and investment research also extend all the way into the complex biotech sector, where he and his readers take advantage of the newest and most groundbreaking medical therapies being developed by nearly 1,000 biotech companies. His network includes hundreds of experts, from M.D.s and Ph.D.s to lab scientists grinding out the latest medical technology and treatments. You can join his vast investment community and target the most profitable biotech stocks in Keith’s Topline Trader advisory newsletter.