Understanding Equity Crowdfunding

An article we liked from Thought Leader Elliot Grossbard:

Equity Crowdfunding Explained

From Regulation A+ to Regulation CF, it can quickly become confusing and difficult to understand the limitations and potential for each.  Crowdfunding

Starting with the basics, there are three types of crowdfunding where people invest their money into a private company in exchange for equity in the company (shares).

#1. Regulation A+ Offering

  • Tier 1 Raise - You can raise up to $20 million in a 12 month period. These funds can be raised from both ordinary and accredited investors and must meet the the Blue Sky investing regulations of each state that an investor resides in.
  • Tier 2 Raise - You can raise up to $75 million in a 12 month period. These funds can come from ordinary or accredited investors. Although it is not required to abide by state-by-state regulations as a Tier 1 raise, there are costly reporting requirements, including audited financials and post-offering reporting.

Each of these types of A+ offerings allow companies to undergo a “test the waters” period to gauge the... 

Read the rest of this article at linkedin.com...

Thanks for this article excerpt and its graphics to Elliot Grossbard.

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