Starting Today, There Is a New Way for Entrepreneurs to Raise Money. Here's the Good, the Great, the Bad and the Ugly. Equity crowdfunding has historically only been open to accredited investors. As of May 16, anyone can invest in a startup with equity crowdfunding.
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Starting today, entrepreneurs have a new way to raise money.
Equity crowdfunding, whereby entrepreneurs sell a portion of their companies in exchange for cash, has historically only been available to accredited investors. As of today, however, anyone can invest in a startup through equity crowdfunding.
This rule change has been a long time coming. Industry stakeholders are eagerly anticipating the spigot for this new pipeline of capital being turned on.
However, launching a new investment vehicle is a serious undertaking and especially in the beginning, there is sure to be some agitation as this new funding mechanism launches.
For a complete explanation of what's happening, why it matters and what each side of the financial relationship -- the entrepreneur and the investor -- should expect, have a look at our five-part feature series on this next generation of equity crowdfunding.