You can see the rules and regulations in other jurisdictions.
An investment advisor in the United States is a fintech company with products and services that meet one of the following criteria:
In this case, the company must be licensed and regulated by one of two organizations:
Equity crowdfunding is a unique way to raise capital for your business without taking on new debt. It’s a form of fundraising that attempts to attract investors who are willing to contribute funds toward your business goals in return for a financial stake in the company.2
Equity crowdfunding is also called regulation crowdfunding because it is regulated by the federal government. Even though you’re not selling shares on a stock exchange, your business is still offering equity to investors in exchange for capital. As a result, the process entails more rules than you would encounter with a simple online fundraising campaign like GoFundMe or Kickstarter.2
Failure to follow the rules might force you to refund any investments you receive. The U.S. Securities and Exchange Commission (SEC) might even freeze your business’ ability to offer shares to investors for a period of time.2
Below are a few of the steps you’ll need to complete in order to sell business shares through an online crowdfunding platform.