The SEC voted unanimously in October to advance rules that would permit startup businesses to cast a wider net in raising capital through online crowdfunding portals. The proposed rules set the stage for what could look like a tempting new investment opportunity.
Startups could raise up to $1 million in a 12-month period from unaccredited investors, although levels of contribution would be capped by their income or net worth. Under current law, the sale of securities to individuals is limited to accredited investors with a net worth of more than $1 million (excluding their home) or those who earn $200,000 or more per year.
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