A look at the CROWDFUND Act
Key features of the U.S. Senate’s CROWDFUND Act include:
- Entrepreneurs can raise up to $1M annually through an SEC-registered crowdfunding portal.
- Individuals earning less than $100K can invest the greater of $2K or 5% of their income. Those earning more than $100K can invest the greater of $100K or 10%.
- Crowdfunding portals must provide investor protection, including investor education about risks related to small issuers and liquidity.
Crowdfunding for Investment, the Social Entrepreneur’s New Frontier
It is hard to even begin to assess the potential impact of citizen investment in emerging companies. And, for social innovators, it is an exciting new juncture. We have talked in the past about citizens’ abilities to ‘decide with their wallets’ through buying from socially responsible companies and outlining new policy an legislation that supports social entrepreneurs. This new turn enabling tangible investment in new companies only underscores this concept. It can make each of us impact investors, seeking both financial and social return on our small investments.
Social entrepreneurs, it’s time to get in the know about the specifics of this legislation and become poised to act if it passes and is signed into law by President Obama.
As they say, shift happens. And sometimes, we shift + forward.