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takyon [soylentnews.org] writes:

fair-and-equitable dept.

Small investors could be permitted to invest in startups online [theregister.co.uk] under new U.S. Securities and Exchange Commission (SEC) rules:

America's financial watchdog says anyone with spare cash will be able to buy a slice of a startup online without having to fill out mountains of paperwork.

Until now, if you fancied plowing your some of savings into a fledging biz – say a trendy but privately held San Francisco tech upstart – there are all sorts of requirements and red [sec.gov] tape you must overcome, all pretty much put in place after the 1929 US stock market crash.

Under new rules from the SEC [sec.gov], a startup can raise $1m a year by selling stock in itself to investors, although the individual amounts will be regulated. Those with an annual income of up to $100,000 can spend either $2,000 a year or five per cent of their net worth in startups, or 10 per cent if they make more than a hundred grand.

"There is a great deal of enthusiasm in the marketplace for crowdfunding, and I believe these rules and proposed amendments provide smaller companies with innovative ways to raise capital and give investors the protections they need," said SEC chairwoman Mary Jo White. "With these rules, the Commission has completed all of the major rulemaking mandated under the JOBS Act."

From the SEC release [sec.gov]:

The new crowdfunding rules and forms will be effective 180 days after they are published in the Federal Register. The forms enabling funding portals to register with the Commission will be effective Jan. 29, 2016. [...] The SEC is seeking public comment on the proposed rule amendments for a 60-day period following their publication in the Federal Register.

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