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In the USA, any fintech agency specializing in the delivery of appropriate products and services is defined as an investment advisor if it is qualified as:

• an organization that provides consultation on security issues,
• an entity that conducts security analyses and releases the obtained data in a systematic manner,
• a company that offers consultation for those clients who plan to invest, including robo-advisor services,
• an agency that ensures full-service brokerage ¹

Here, the organization should be provided with a license and controlled by one of two institutions:

1. Securities and Exchange Commission (SEC)
2. Commodity Futures Trading Commission (CFTC) ¹

Equity Crowdfunding

The term “equity crowdfunding” means that your company has a chance to mobilize investments without debt accumulation. This is a type of fund development that allows business owners to engage magnates who are ready to invest their money in their ventures and become shareholders in their companies.²

The term “equity crowdfunding” is known as “regulation practice” as it's under the control of the federal authorities. Although you are not engaged in disposing of your shares, you offer equity acquisitions to providers of funds. Thus, the procedure will be rather complicated compared with e-fundraising operations such as GoFundMe or Kickstarter.²

If you play loose and ignore the regulations you should comply with, you'll have to refund money given to you by investors. The U.S. Securities and Exchange Commission (SEC) has the right to suspend you from your fund sharing opportunities for a certain fixed period.²

Take advantage of the following recommendations if you require disposing of your shares using an online crowdfunding platform.

• Be satisfied with an annual crowdfunding investment of no more than $5 million
• Collaborate with an SEC-registered broker-dealer or a reliable funding portal
• Try to turn your financial project into a generally known one by considering the sum of money your venture earns
• Keep the provided restrictions on the funds you get from unaccredited financiers ²

Banking in the USA

Fintech in the USA

Fintech in other countries

Notes

1. https://thelawreviews.co.uk/title/the-financial-technology-law-review/usa
2. https://www.forbes.com/advisor/business-loans/equity-crowdfunding/