BizTech Law Blog Banner

BizTech Law Blog

SEC Finalizes Long-Awaited Title III Crowdfunding Rules
Posted by:

title iii crowdfunding rulesThe long awaited SEC Title III crowdfunding final rules have arrived.

The new rules will open the equity crowdfunding gates to non-accredited investors. Non-accredited investors include individuals: (A) with a net worth less than $1 million, or (B) who have an annual gross income of less than $200,000 (or $300,000 together with their spouse). In other words, businesses will now be permitted to utilize crowdfunding to raise capital by selling their securities to “everyday folks.”

Below are some of the key highlights from the new rules.

  • An issuer is permitted to raise a maximum aggregate amount of $1 million through crowdfunding offerings in a 12-month period.
  • Individual investors, over the course of a 12-month period, are permitted to invest in the aggregate across all crowdfunding offerings up to:
    • If either their annual income or net worth is less than $100,000, then the greater of:
      • $2,000; or
      • 5 percent of the lesser of their annual income or net worth.
    • If  both their annual income and net worth are equal to or more than $100,000, then 10 percent of the lesser of their annual income or net worth.
  • During the 12-month period, the aggregate amount of securities sold to an investor through all crowdfunding offerings may not exceed $100,000.
  • Issuers conducting a crowdfunding offering must file certain information with the SEC and provide this information to investors.
  • Crowdfunding transactions must take place through an SEC-registered intermediary, either a broker-dealer or a funding portal.

The final crowdfunding rules will become effective 180 days following Federal Register publication.

We will provide a more detailed analysis of the new rules in the near future. Stay tuned!

Authors

Categories

Recent Posts

Jump to Page

Foster Swift Collins & Smith PC Cookie Preference Center

Your Privacy

When you visit our website, we use cookies on your browser to collect information. The information collected might relate to you, your preferences, or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. For more information about how we use Cookies, please see our Privacy Policy.

Strictly Necessary Cookies

Always Active

Necessary cookies enable core functionality such as security, network management, and accessibility. These cookies may only be disabled by changing your browser settings, but this may affect how the website functions.

Functional Cookies

Always Active

Some functions of the site require remembering user choices, for example your cookie preference, or keyword search highlighting. These do not store any personal information.

Form Submissions

Always Active

When submitting your data, for example on a contact form or event registration, a cookie might be used to monitor the state of your submission across pages.

Performance Cookies

Performance cookies help us improve our website by collecting and reporting information on its usage. We access and process information from these cookies at an aggregate level.

Powered by Firmseek