SEC wants to allow crowdfunding for investment
Federal regulators want to allow companies to raise up to $1 million in investment through crowdfunding sites like Kickstarter, which would create new financing opportunities for small businesses.
Don Gooding, executive director of the Maine Center for Entrepreneurial Development, told the Bangor Daily News the rule change proposed by the U.S. Securities and Exchange Commission for next year “is a major step toward the most dramatic change for financing small businesses in many decades.”
Generally, the proposal would allow a company to take on a one-year crowdfunding effort to raise up to $1 million from many small investors. The proposed rules would limit investors with net worths or annual incomes of under $100,000 to contributing up to $2,000 or 5% of their annual income or net worth.
Susan McKay, of the Orono-based Cerahelix, said the change could help startups in their financing efforts but said managing many small investors could also pose challenges when compared with finding a few higher-level investors.
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