On Friday, October 30, the SEC announced important new rules pertaining to Title III of the JOBS Act that will for the first time allow retail investors to use crowdfunding to take an equity stake in private businesses.
Crowdfunding’s rapid growth is helping democratize access to capital for entrepreneurs around the country, many of whom are underserved by traditional financing platforms. For retail investors, the new rules under Title III enable participation in the startup economy that simply wasn’t possible before the advent of crowdfunding.
While more needs to be done to reverse the decline in U.S. entrepreneurship, the emergence of this new capital market is a critical step in the right direction.
