As of May 16, 2016 Investors from all wealth classes are able to participate in private capital markets. Accredited investors can invest in private small businesses with little restriction and now non accredited investors can join this exclusive group. FundWisdom is at the forefront of the JOBS (Jump-start Our Business Startups) Act Title III, which will enable unaccredited investors to take part in these investment opportunities.
Changes for May 2016
The SEC passed Title III October 2015 and it took till May 2016 to enact the updates. SEC Chair Mary Jo White had delayed issuance, but the markets is becoming more democratized now that investors of all economic classes can participate, but now we must wait for changes in the restrictions placed upon those non accredited investors. The approval of Title III of the JOBS Act makes it possible for non-accredited investors to invest and participate online in startup businesses and private firms. This will allow for larger groups of people to invest smaller amounts of money. As one of the most awaited components of the JOBS Act, Title III is opening a road of possibilities for nonaccredited individuals to invest in private equity offerings.
This law will enhance entrepreneurs' chances of success, improve economies and increase jobs. This increase in capital will allow more individuals to bring big ideas to market and turn their strategic vision into a reality. Startup businesses will surely benefit from this rule, as it provides an opportunity for long-term success and ongoing development by bringing entrepreneurs closer to future investors. Title III is sure to disrupt the capital market by bringing a huge change in the world of investment that was previously reserved for venture capitalists and angel investors. It will be possible for every individual, not just the wealthy and rich, to invest in the startups. Everyday citizens will also be able to participate in the investment or the fundraising process, regardless of their bank balances. The technological breakthrough has already begun the process of automating and streamlining costs, and opened up further avenues for startup and private businesses to raise capital.
Non-accredited investors will be bringing more capital to these private markets. Many investors will be putting their money in the market for the first time, but it is important to understand that they are not entirely new to this. Many ideas were usually funded by friends and family at the initial stage. Title III will enable entrepreneurs and new entrants to create their personal network to raise capital and will also allow accredited as well as non-accredited investors to invest their money.
The trend has begun to change in sentiment towards crowdfunding. Those who were previously skeptical have started acknowledging the crowdfunding concept. Many venture capitalists and angel investors are utilizing platforms to get funding from other accredited investors. As an investment vehicle, crowdfunding has truly proven to be the road to success for individuals seeking an investment opportunity and for those who want to finance their ideas and cover the startup cost. With Title III in place, every entrepreneur and investor will be moving closer to equity crowdfunding. The groundwork for the much-anticipated equity crowdfunding has already started.
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