Today, the SEC broadly expands the ability of startups to finance new projects through crowdfunding. Private equity companies are now allowed to raise up to 50 million dollars through non-accredited investors. Until now, regulations made it difficult for companies to attract substantial early stage funding without ceding control to VCs or angels.

For small and medium-sized companies, this ruling could be a boon for capital investment. Many growing companies without access to accredited investors plateau as they struggle for resources. Crowdfunders, like Kickstarter, have provided a launch pad for emerging companies. Today’s ruling would allow crowdfunding to play an even bigger role in early stage investment, allowing small investors to become full-fledged shareholders.

Another win for new companies is the ability to advertise these “mini IPOs.” Marketing could greatly help private companies connect with early adopters willing to take a risk on innovative ideas. This new regulatory approach will give more developers the resources they need to finally bring their ideas to market.

 

Image: Security and Exchange Commission / license / no changes made