Keeping Up With The Bulls

A personal finance blog focused on making more money, saving money and smart spending.

  • Start Here
    • Start Here Latest Posts
    • Personal Finance Terms to Know
    • Money in Your 20s
    • Saving Money Tips
  • Career
    • Career Latest Posts
    • Advance Your Career
    • Corporate Benefits
  • Investing
    • Invest Latest Posts
    • Passive investing
    • Invest in startups
    • Retirement
  • Smart Spending
    • Smart Spending Latest Posts
    • Saving Money Tips
    • Housing
    • Food
    • Holidays
    • Wedding Guest
    • Wedding
  • Tools
    • Tools and Resources Latest Posts
  • Contact
You are here: Home / Start Here / Legalized Equity Crowdfunding: What to Know

Legalized Equity Crowdfunding: What to Know

01.20.2019 by admin // Leave a Comment

  • Share
  • Tweet
  • Email
  • Print
Regulation crowdfunding

So you want to invest in private companies but you aren’t an accredited investor quite yet? Title III of the JOBS Act, passed in 2012, created an opportunity for the average investor to invest in private companies. Regulation crowdfunding allows startups to raise up to $1,070,000 per year from both individual investors and accredited investors through registered funding portals.

There are still some limitations such as how much a person can invest in a 12 month period. These investment limits are inflation-adjusted.

  • If your annual income OR your net worth is less than $107,000, you can only invest up to the greater of either $2,200 or 5% of the lesser of your annual income or net worth
  • If both your annual income AND net worth are equal to or more than $107,000 then you can invest up to 10% of your annual income or net worth, whichever is less, but not to exceed $107,000

If your annual income is $150,000 and your net worth is $200,000, the JOBS Act crowdfunding rules will let you invest up to $15,000 over a 12-month period. It is $15,000 and not $20,000 because your annual income is less than your net worth.

Generally there is a feeling that the limitations and regulations most companies still restrict investments from non-accredited investors, and the JOBS Act hasn’t had the impact intended. Mainly, companies don’t want to pay the associated costs and file all of the mandated disclosures when they can raise capital under Regulation D which is both easier and cheaper. However, there are some bright spots. Crowdfund Capital Investors wrote a report and found that while the market is still young, it is growing at a rapid pace and found a high success rate for offerings.

You can find all of the registered funding portals on the FINRA website here. FINRA also provides an overview of Crowdfunding and what Investors should know here.

Has anyone invested in private companies through these funding portals? What was your experience?

Related

Categories // Start Here Tags // Passive investing

Leave a Reply Cancel reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Search Blog Posts

Subscribe to Blog via Email

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Recent Posts

  • How to Buy Brokered CDs on Charles Schwab July 11, 2023
  • Advice for 2023 Grads From a Millennial That Graduated in 2010 May 26, 2023
  • How To Identify Your Financial Blind Spots April 26, 2023
  • How to Save Money Traveling to Europe in 2023 April 18, 2023
  • Turning Tight Finances Around: How Long-Term Investments Can Generate Cash April 11, 2023

Follow Us

  • Twitter
  • Pinterest

Copyright © 2023 · Modern Studio Pro on Genesis Framework · WordPress · Log in

  • Facebook
  • Twitter
  • Pinterest
  • Email
  • Print