As we discussed in the post “What is Crowdfunding?”, there is a new crowdfunding bill making its way through Capitol Hill that aims to establish an SEC exemption for small investments to provide early capital to small businesses and start-ups.A Quick Look at the Entrepreneur Access to Capital ActThe bill, titled the Entrepreneur Access to Capital Act (H.R. 2930) would let small businesses use crowdfunding mechanisms to:
- sell unregistered securities up to a total of $2M; and
- would let investors individually invest up to a total of $10K (or 10% of their income) using crowdfunding
The UpdateThis week has been a big one for SEC reform. As reported by Portfolio.com, on November 2nd, 2011 the House passed Regulation A reform. Specifically the bill (Small Company Capital Formation Act) upped the amount of non-SEC registered stock that small companies could offer to the public from $5M to $50M.And on November 3rd, 2011 — the House made history by progressing the Entrepreneurship Access to Capital Act with its vote of 407-17.
What’s Next
The crowdfunding bill will make its way to the U.S. Senate for vote. If the overwhelming support in the House and President Obama’s endorsement of both bills are any prediction, it seems like SEC reform that could support social entrepreneurs may become law in the near future.
Innov8social
Innov8social
Innov8social
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