News & Events


June 19, 2015 marked a very exciting day for small businesses and investors alike. The implementation of Title IV of the JOBS Act, also known as Regulation A+, has leveled the playing field for investors by granting early stage companies the ability to raise capital from anyone as opposed to only accredited investors.


Previously, an accredited investor was an individual who had earned income exceeding $200,000 (or $300,000 with a spouse) in each of the prior two years and "reasonable expects the same for the current year" according to the Securities and Exchange Commission (SEC). This made up only 3.5 percent of US households. Now, an investor can be anyone with the following income limitations:


If annual income or net worth are less than $100,000:

    • An investor will only be permitted to invest up to $2,000 or 5 percent of income or net worth, whichever greater.

If annual income or net worth are greater than $100,000:

  • An investor will only be permitted to invest up to 10 percent of annual income or net worth, whichever greater, without exceeding more than $100,000 of purchases in a 12-month period.


Crowdfunding intermediary platforms, also known as funding portals, must register [under Section 15A of the Exchange Act] and comply with SEC requirements before offering investment opportunities to the general public. Funding platforms will use the power of the internet, social media, and television to market investment prospects to the general public. A company looking to sell shares should expect roughly $40,000 to $50,000 in regulatory expenses. Strategic consideration of using this method to raise capital should be discussed with your advisor to consider the related cost-benefit. Clients in the emerging technology and application development industries can more easily attract prospective investors and fund their next big idea giving entrepreneurialism a fighting chance at success.

The SEC has set disclosure requirements for these emerging start-ups including, but not limited to:

Officer, director and greater than 20 percent owner information

Company description and proposed proceed usage

Public offer price, target offer amount, the deadline to reach the target amount and whether investments beyond the target will be accepted

Certain related party transactions

Financial condition of the company

Financial statements of the company that depending on the amount sold within a 12-month period would be reviewed or audited or accompanied with the business's tax return


Though this change presents opportunities for a new population of investors, challenges can also be foreseen. On the flip side, less experienced businesses that were otherwise unable to raise capital through banks, private equity and other conventional methods will be among the companies offered with this wave of investing. Industry research, due diligence and sound advisory are highly suggested for clients embarking on these new investment opportunities.