<div _ngcontent-c22="" innerhtml="
Prior to the Jumpstart Our Business Startups (JOBS) Act, advertising investment opportunities in private companies were banned. That all changed when the JOBS Act was signed into law but it required the Securities & Exchange Commission (SEC) to write the rules for three different ways private companies could raise money:
- Crowdfunding from accredited investors — wealthy people — a Title II raise was implemented on September 23, 2013.
- Doing a “mini IPO,” Regulation A+ or Title IV raise was implemented on June 19, 2015. While dramatically less expensive than an IPO, there is still substantial cost and legal and financial requirements. For these reasons, this form of financing is not recommended for very early-stage companies, which don’t have the resources to devote to raising money in this way.
- Raising money from the ‘average Jane’ for small businesses, Regulation Crowdfunding (Reg CF) or Title III was approved on May 16, 2016. Separately, the SEC loosened rules that guide states in enacting their own intrastate crowdfunding laws, which are similar to Reg CF.