Tag Archives: The Securities Act

Crowdfunding 101

The concept of “crowdfunding” offers a new option to startups and small businesses for raising capital, although it is a greatly misunderstood and misused term. It refers to the pooling of money from a crowd for the funding of a project or venture, whether utilizing a donation model, reward model, royalty model, debt model or equity model. Securities laws apply when equity or debt securities are offered. Title III of the JOBS Act added a new Section 4(a)(6) to the Securities Act, which provides an exemption from the registration of such securities provided the issuer complies with certain rules and …

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