Noreen Weiss – The State of Crowd Funding Regulation in the United States
In the United States, crowdfunding has evolved over the last five years to refer to several different funding approaches:
- Donation-based funding that is not a securities offering.
- Securities offered via an internet platform, structured in a manner to comply with the customary private placement exemption criteria under Regulation D of the United States (US) Securities Act of 1933 (the ‘Securities Act’), for offerings to ‘accredited investors’ (being certain specified institutional investors, and natural persons who meet net income or net worth tests) – this type of sale is sometimes referred to as ‘accredited investor crowdfunding’ but it is not crowdfunding in the true sense of the concept.
- Securities offered to anyone, including retail investors, pursuant to the criteria provided in the safe harbour rule ‘Regulation Crowdfunding’.
This is a broad topic and this article will focus only on retail crowdfunding pursuant to Regulation Crowdfunding.