THINGS YOU SHOULD KNOW ABOUT EQUITY CROWDFUNDING FOR YOUR STARTUP
Introducing Equity Crowdfunding to Raise Funds for Startups in the USA
Equity crowdfunding is a type of crowdfunding that is primarily concerned with Title III of the Jumpstart Our Business Startups (JOBS) Act. It is an investment type where several investors invest their capital into a specific startup business in exchange for equity shares. Often, this type of crowdfunding is used by the early-stage companies to raise their seed funding. Non-accredited investors can invest in equity crowdfunding as it has the potential for earning profit as the startup succeeds. Besides, it doesn't need a substantial amount of money to get started, as it depends on how much a startup seeks funding.
However, there are drawbacks, too, with equity crowdfunding such as inherent risk and timeframe. With no guarantee of whether a new startup will take off or fail, equity shares of the investors would be worthless. Even after the success of a startup, it may take years before investors can sell equity shares.
Equity Crowdfunding Regulation in the US
As soliciting investments from the public is illegal, so equity
