Crowdfunding Law: 6 Things to Keep in Mind

Crowdfunding Law: 6 Things to Keep in Mind

The SEC (Securities and Exchange Commission) established a set of rules for Crowdfunding. All provisions in this law dares to limit the concept of crowdfunding and is set to be passed this 2016.

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Here are 6 things that you must consider once this law is passed:

  • Margins on Investments
    You can actually invest at least $2,000 to a business, but if you are planning to invest funds higher than this, then you must be aware of the limits for investing large sums of money.
  • Be Warned and Have a Keen Eye on Detail
    Having an eagle’s eye concept on reviewing the premises of the rules will be helpful. You must comply with all the given requirements from the law. Never satisfying to those rules will lead to cases being filed against you.
  • Who are Your Investors?
    It is important that you know your investors — and be able to identify the ones who are accredited or not. Remember that once you start introducing your idea to the market, many will come to you saying that they love the product and is willing to fund for it. So, always be careful and as much as possible, be wise and avoid fraudulent investors.
  • Exceeding on Fund Target
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    You are allowed to exceed your fund target, so that if any investors decides to back out, you will be safe since you reached the expected amount. But if you reach the target before 30, or even 90 day end periods, then you must close the accepting of funds and work on your idea/product.

  • Be Lucid with Investors
    Be transparent with your investors. You must disclose all changes in your transactions since you were able to raise the funds needed for your business because of them.
  • Keep Straight Ahead
    You must make sure that your business financials are going in a straight path and not on a downward spiral. Get an accountant or even get great accounting software that will help you publish reports in an efficient and timely manner. Having an attorney to help explain to you the premises of this law is better