Equity Crowdfunding: Risk, Reward, & Regulation
In April 2012, President Barack Obama signed into law the Jumpstart Our Business Startups (JOBS) Act. One aspect of the Act, implemented by the Securities and Exchange Commission (SEC) in 2015, was the elimination of net worth and income requirements for investors seeking to participate in “equity crowdfunding,” a mechanism through which businesses raise capital from large numbers of individual investors via online platforms.
In the years since, equity crowdfunding has taken off, leading to much debate over how the SEC ought to regulate it. In this Fourth Branch video, industry professionals and legal and financial experts break down equity crowdfunding and debate how regulators can most effectively foster innovation while preserving investor safety in the space.