Promoting a New Source of Liquidity for Small Businesses : An Examination of U.S. Regulation of Crowdfunding

New companies seeking finance often relied on angel investors and venture capitalists. The latest innovative attempts to provide funding is crowdfunding which refers to investments by a substantial number of persons for a wide variety of business and social activities. Congress, in its JOBS Act, encouraged such investments without the requirement of strict securities' laws filings by provisions for limited sums by average persons that would not cause substantial financial burdens should the venture invested in not succeed. The article discusses the legal and regulatory implications therein