Crowdfunding has made waves despite its short time of existence, and it has proved to be an essential means for raising capital for starting up businesses. Its success cannot be denied, no wonder it caught the minds of entrepreneurs and investors.
There are three different types of equity crowdfunding offered under the JOBS Act:
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Accredited Crowdfunding - Regulation D (made possible by Title II)
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Crowdfunding Plus, Title IV/Regulation A+ (“Reg. A+”)
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Retail Crowdfunding, Title III/Regulation Crowdfunding (“Reg. CF”)
These are the types of equity crowdfunding but we will be discussing the major difference between Crowdfunding plus, Title IV/Regulation A+ and Retail Crowdfunding, Title III/Regulation Crowdfunding.
Actually, these two are pretty much similar to each other because for the most part they do the exact same thing. The regulation A+ allows entrepreneurs raise up to 50million dollars a year from non-accredit and accredit investors alike, but it does require the prior authorization of the SAC before a company can begin selling shares and collecting cash. While the Retail Crowdfunding, Title III/Regulation Crowdfunding is only allowed to raise up to a million dollars a year and does not require the prior authorization of the SAC before a company can begin selling shares and collecting cash.
Here are the common advantages of the two:
● Founders set terms
● Founders set value of company
● Founders set number and price of shares
● Founders set minimum investment
Howbeit the difference between these two, I don't think Title IV (Regulation A+) and Title III (Regulation CF) of the JOBS Act should be competing to determine which is better. Both are designed to serve two different audiences and as such will be best suited for different companies at different stages.
what do you think about this?
Submitted May 24, 2016 at 12:46PM by vladtitov151 http://ift.tt/1s7z0Ba
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