SEC Proposes Rule Changes to Crowdfunding and Reg A+

The Securities and Exchange Commission proposed significant changes to crowdfunding and Reg A+ in a big to boost the use of the capital raising methods; the new rules would allow companies to raise up to $5mn via crowdfunding and up to $75mn via Reg A+; from 2016 to 2018 there were more than 500 crowdfunded deals with a median amount raised of $107,367 and a median investor contribution of $260; limiting the amount a company can raise or an investor can put into a deal was something lawmakers thought in 2012 was necessary since these deals were thought to be on the lower end of the quality spectrum; “These proposals are intended to create a more rational framework that better allows entrepreneurs to access capital while preserving and enhancing important investor protections,” said SEC Chairman Jay Clayton to the WSJ; the proposal will now go through a 60 day public comment period. The Wall Street Journal

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