Note from the CEO: We all know the Jobs Act is still a work in progress with a lot of regulatory hurdles remaining. Smaller investors can still only participate in crowdfunding to a limited degree, and those limitations imply increased risk. This article argues that giving non-accredited investors more access to single issuer funds would certainly help level the playing field in investors’ diversification, and hence increase their propensity for investing success. So as the law stands now, equity crowdfunding is still limited from what it was truly designed for; allowing small startups to access capital from a huge pool of investor capital (including non-accredited investors) who truly want to participate, but are limited from doing so.
“Regulations under the JOBS Act, including Regulation Crowdfunding, Regulation A+ and Rule 506(c), have dramatically opened up investment opportunities in private companies to non-accredited investors. Nonetheless, non-accredited investors still face significant limitations on their ability to participate in the market for private securities – which at least one commentator has called the “new public markets.” Because the JOBS Act regulations restrict the crowdfunding special purpose vehicles available to non-accredited investors to single issuer funds, such investors are denied a tool that would facilitate broad-based, diversified investing in private securities.”