A path for securities-based crowdfunding

Crowdfunding is a relatively new method of raising money through small, individual contributions from a large number of people (crowdsourcing), typically via the internet.

Popular websites have helped to successfully raise money in the U.S. for a wide range of projects. These projects include raising money to develop the latest wearable tech devices, to producing niche films & music, to supporting charitable & civic causes.

However, broad-scale, securities-based crowdfunding has not previously been used in the U.S., likely due to the risk of triggering the registration and reporting requirements of the U.S. securities laws.

The new SEC rules will likely allow startups and other smaller businesses to raise capital through the internet, while providing for certain protections investors.

When are the new crowdfunding rules effective?

The new rules will become effective 180 days after they are published in the Federal Register (likely sometime in May 2016).

How can I learn more?

PwC has created a short brief about the new rules here.

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