Crowdfunding: Partnering with the Public
In America, the largest crowdfunding market, legislation on crowdfunding varies from state to state. When a business is involved in equity-based crowdfunding, the business is selling many small shares to investors. Prior to crowdfunding, selling a share to an investor was a lengthy and costly process, riddled with paperwork and expensive legal fees.
The older laws that applied to selling shares in a company are not financially feasible or time effective.Various states in America have changed their legislation on crowdfunding to make it easier to raise capital. Many of these changes came just last month. Wisconsin, Texas and Indiana have all set forth new rules to allow companies more freedom and less bureaucracy when receiving money from crowdfunding investors. These three states have all raised the amount that can be raised, unaudited, into the 7-figure range.
This is beneficial for both entrepreneurs (for obvious reasons) and for state governments, as these states attract more new companies to open up shop in their jurisdictions. These new businesses will provide job opportunities for local residents and provide tax revenue for the state, an obvious win-win for all parties involved.
Original infographic from: GoGetFunding.com
