Crowdfunding – A Potential New Wave of Startup Financing

As you may have heard, Congress is now debating certain bills which would allow startups to raise funds in a new less restrictive manner, i.e. through “crowdfunding”.  The lead bill is the Jumpstart Our Business Startups (“JOBS”) Act passed by the House on March 8, 2012.  There is fierce opposition from various groups to the House version of the JOBS Act – including most states, the SEC, the New York Times, Bloomberg, accounting groups, AARP (?) and even the the old “Sherriff of Wall Street” himself, Eliot Spitzer.  In this post we’ll look at what crowdfunding is, what Congress is proposing and the effects it may have.

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