Federal “Crowdfunding” Rules to Support Small Businesses

Written by Innovate New Albany@InnovateNA11 years ago

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U.S. securities regulators recently lifted a ban on general solicitations or advertising directly to investors, giving startups the opportunity to reach a broader pool of potential investors and a welcome alternative to traditional venture capital firms.

While entrepreneurs can use direct approaches such as LinkedIn, Facebook, Twitter and, even, billboards or ads, others are choosing online exchanges such as AngelList that matches entrepreneurs and small investors.

Many experts have suggested that entrepreneurs tread cautiously though. The federal rule changes are part of the Jumpstart Our Business Startups Act or JOBS Act and securities regulators are still working on the specific rules that will govern such things as how to qualify a potential investor and what types of marketing messages are permissible. Additionally, traditional venture capital often comes with valuable guidance from experienced business people on everything from finances to operations.

Innovate New Albany, the city’s incubator for technology startups, entrepreneurs and small businesses, features 16,000 square feet of space within the New Albany Business Park’s Signature Office Building, 8000 Walton Parkway.