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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