Growing companies seeking to raise up to $50 million have a new financing option, starting Friday: a process that will open some private businesses to a wide pool of new investors.
More than three years in the making, the regulatory change, an expanded version of a rule known as Regulation A, is intended to let promising companies — the kinds typically backed by venture capitalists and wealthy angel investors — raise money by selling equity stakes to people of more modest means.
Businesses will be able to advertise their offerings — described as “mini I.P.O.s” by many in the industry — on websites and through social media, giving fans and customers an opportunity to buy shares in companies that are not yet, and may never be, publicly traded.
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Andrew Gierczak, left, and Henry Schwartz, two of the founders of MobCraft, a brewery based in Madison, Wis., took advantage of a new state law to raise $67,000 from 52 state residents.
Tired of Waiting for U.S. to Act, States Pass Crowdfunding Laws and RulesJUNE 3, 2015
The new rules are complex and controversial. . . . . .>>> READ MORE at: