The CROWDFUND Act

  • A company can crowdfund up to $1 million over a 12 month period ($2,000,000 with audited financials)
  • Individuals earning less than $100,000 may invest up to $2,000 or 5 percent of annual income, whichever is greater, over a 12 month period.
  • Individuals earning $100,000 or more may invest up to 10% of annual income, capped at $100,000, over a 12 month period
  • Investors can fund one company or several companies as long as they remain within these annual limits
  • Companies’ crowdfunding must be registered/incorporated in the U.S.
  • Companies crowdfunding must provide a description of their ownership and capital structure
  • An investor must wait 12 months before selling her/his securities unless the sale is to a family member, the issuing company, or an accredited investor
  • A crowdfunding round does not prevent a company from raising capital through other legal channels
  • Top employees of issuing companies must successfully undergo a background check.
  • Companies’ crowdfunding are exempted from the 500 shareholder cap.
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