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Investing in Startups Is Opening Up to the '99 Percent' The co-founder of crowdfunding platform RocketHub explains what the new generation of equity crowdfunding will look like and why it's important.

By Catherine Clifford

Opinions expressed by Entrepreneur contributors are their own.

Crowdfunding allows entrepreneurs to circumvent the institutions of finance to raise money to fund their dreams. It is a democratization of the fundraising process. As of May 16, crowdfunding is becoming more democratic on the investor side, too.

Equity crowdfunding, in which entrepreneurs raise cash by selling a piece of their company, has historically only been open to accredited investors, or those investors who meet certain levels of wealth. In this second episode of Crowdfund with Cat, Alon Hillel-Tuch, a co-founder of the crowdfunding platform RocketHub, explains that as of May 16, a law change will mean that everyone can potentially be an investor in equity crowdfunding. Anyone with the cash and the interest will be able to invest in startups.

Hillel-Tuch walks us through what the change means and how it will affect the startup finance landscape.

RocketHub was acquired by entrepreneurship resource center EFactor a year ago. Since then, Hillel-Tuch has left and is now a partner at the venture building group, Stacked VB.

For more on the rule change and how entrepreneurs and investors should prepare, check out our series of written stories on equity crowdfunding (linked to below).

Starting May 16, Entrepreneurs Can Raise Money in a Whole New Way. Here's What You Need to Know.

An Entrepreneur's Essential Guide to the New Wild West of Funding Opening on May 16

Your Guide to the High-Risk, High-Reward World of Investing in Startups When Fundamental Finance Law Changes Go Into Effect May 16

Which Entrepreneurs Will Benefit Most From the New Era of Crowdfunding?

Next Generation Crowdfunding Starts May 16. Expect Opportunity and Growing Pains.

Catherine Clifford

Frequently covers crowdfunding, the sharing economy and social entrepreneurship.

Catherine Clifford is a senior writer at Entrepreneur.com. Previously, she was the small business reporter at CNNMoney and an assistant in the New York bureau for CNN. Catherine attended Columbia University where she earned a bachelor's degree. She lives in Brooklyn, N.Y. Email her at CClifford@entrepreneur.com. You can follow her on Twitter at @CatClifford.

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