The SEC just voted on and passed rules to implement Title III of the JOBS Act, bringing non-accredited investors into the fold for equity crowdfunding.
This sets the stage for equity crowdfunding to continue its exponential growth over the next 3-5 years, on top of the existing market for accredited investors.
As the CEO of equity crowdfunding platform Crowdfunder.com, I’ve had a front row seat as a participant in JOBS Act legislation and the long delayed regulatory rulings.
The public has been waiting on Title III equity crowdfunding for three and a half years now, as the SEC continuously stalled in finalizing rules to allow non-accredited investors to come into the market and invest in startups under Title III.
Crowdfunding was already expected to surpass VC in 2016 at $34B a year in total crowdfunding online, across all types of crowdfunding. By bringing in a new class of investors with Title III, we can expect further growth of the equity market as venture capital continues to move online.
But with today’s vote, Title III equity crowdfunding will kick off and go live in 90 days, once a commenting period takes place and the new final rulings are published in the federal register.
As equity crowdfunding with non-accredited investors under Title III comes into effect, it will have massive implications for startups and investors alike, allowing everyday citizens to invest in startups. This will open up a tremendous amount of capital available to early stage companies.
Sam Guzik, securities attorney involved in legislative and regulatory efforts surrounding equity crowdfunding said, “The growth and lack of problems to date with Title II equity crowdfunding, as well as many state-based crowdfunding initiatives being voted in, appear to have given the SEC more comfort in moving ahead with Title III rules. It’s great for everyday people who have been shut out from investing to date.”