Regulation A+ is a huge deal for companies looking for funding opportunities. The JOBS Act now allows businesses – including those in the cannabis industry – to raise investment capital from non-accredited investors, whether via crowdfunding or another avenue. In other words, Reg. A+ opens up an entirely new universe when it comes to seeking capital.
Since the Securities and Exchange Commission has approved Title III of the 2012 Jumpstart Our Business Starts Up Act (“JOBS Act”), the passage of this act dramatically changes the way start-ups raise capital for new ventures, making it possible for companies to raise up to $1 million annually through equity crowdfunding without having to cut through the red tape of registering those securities with the Securities and Exchange Commission – a game-changer that’s long overdue.
Now anyone can invest in startups, small businesses or even real estate through crowdfunding, although there are still certain requirements that have to be met and restrictions that apply based on an investor’s income and net worth.
Following the SEC’s vote, Title III of the JOBS Act will take effect on January 29, 2016. With the crowdfunding industry expected to top $34 billion by year’s end, the arrival of non-accredited investors on the scene could theoretically push 2016’s fundraising projections off the charts!
We will have to wait and see, but until then, it’s probably wise to consult with industry experts to get a good idea on how to use Reg. A Paper to your company’s benefit and make sure you go through all the regulatory headaches properly. Even though the rules of Crowdfunding seem to have changed for the better, you still want to go about it in the right way.