New Crowdfunding Rules Let the Small Fry Swim With Sharks
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Kelechi Anyadiegwu, 26, founded Zuvaa, an online African fashion marketplace. She plans to raise money through crowdfunding. CreditBryan Anselm for The New York Times
If you’ve always dreamed of being Mr. Wonderful from “Shark Tank,” now is your chance.
Starting Monday, new rules will permit anyone, not just the moneyed, to risk $2,000 a year or more investing in small companies in exchange for a stake in the business. Companies can raise up to $1 million a year this way.
This change, years in the making, represents an enormous shift, one that essentially permits anyone to become a venture capitalist — with all the attendant risks of losing one’s shirt on a company that fails. Until now, only accredited investors, meaning those with an annual income of at least $200,000 or a net worth of at least $1 million, have been permitted to take equity stakes in most private companies. The wealthy “sharks” of the ABC reality television series got to risk their money, while the rest of us watched the action from the couch…
New Crowdfunding Rules Let the Small Fry Swim With Sharks
