The U.S. Securities Exchange Act of 1934, section 12(g), generally limits a privately held company to fewer than 500 shareholders. The assumption has been that companies with 500 investors are quasi-public anyway, and for disclosure and other reasons should be forced to go public when the shareholder number approaches this limit. Since the IPO market […]
There seem to be two motivations behind the current buoyant enthusiasm in Congress over crowd funding for entrepreneurs: (1) the democratization of funding for startup companies (no longer requiring such investors be wealthy) and (2) the job creation that is expected to result from creating more startup ventures. In my earlier post, Crowd Funding – […]
Crowd funding enables entrepreneurs to raise money in relatively small amounts from large numbers of interested investors. In the sum, substantial amounts of money (as much as a million dollars) can be raised for each startup company. Recently, entrepreneurs in many countries have been soliciting investment through “crowd funding” websites designed specifically for fundraising purposes. […]
