Higher Crowdfunding Thresholds Suggested

May 5, 2016

Beginning May 16, 2016, new rules (known as Regulation Crowdfunding) will permit individuals to make small investments in securities offered by U.S. businesses on the Internet without meeting any financial or sophistication test. In order to increase the utility of these rules, U.S. Representative Patrick McHenry recently introduced legislation to raise from $1 million to $5 million the amount that companies may raise through crowdfunding offerings in a 12-month period, which is in line with an amendment previously proposed by the SEC. According to Rep. McHenry, the bill would take “small but important steps which will enable capital to get off the sidelines and invested in America’s startups and small businesses.” Read Regulation Crowdfunding, see the SEC’s proposed amendments here, and access the bill at McHenry.house.gov.

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