November 21, 2014
The Jumpstart Our Business Startups Act (also known as the JOBS Act), was signed into law in April 2012 to great fanfare. The crux of the law, for small businesses, was to enable companies to crowd fund capital from non accredited investors in exchange for equity. Currently, small businesses who raise money via crowd funding are limited to giving away ‘rewards’ (like you see on sites like Kickstarter or Indiegogo) or obtaining loans (usually these are personal loans). So what happened to the equity piece?
Unfortunately, even though the details of the JOBS Act were supposed to be worked out by the SEC by December 2012, that piece is currently on hold and the final rules haven’t been issued. That means, for now, it’s not possible to crowd fund your business in exchange for equity.