Chapter 1: Understanding Crowdfunding Regulations

In November 2020, the U.S. Securities and Exchange Commission (SEC) made a significant change by increasing the maximum amount that companies can raise through investment crowdfunding platforms. This adjustment, which came into effect in mid-March 2021, raised the limit from $1.07 million to $5 million within a single year.

Prior to the rise of crowdfunding, only accredited investors—those who meet specific income or net worth criteria set by the SEC—could invest in private companies. To qualify, an individual must earn at least $200,000 annually (or $300,000 for couples) or possess $1 million in assets, excluding their primary residence. This left many small investors unable to participate in startup investments. However, platforms like StartEngine have changed the landscape, allowing small business owners to connect with upper-middle-income investors interested in their ventures.

The SEC stipulates that if your annual income or net worth is below $107,000, you can invest up to either $2,200 or 5% of the greater of your income or net worth in a 12-month span. For those whose income and net worth exceed $107,000, the investment cap is 10% of either, but not surpassing $107,000 in total.

One key reason for the favorable treatment of equity crowdfunding by the U.S. government is the job creation potential within the startup sector. Every year, startups generate millions of jobs, supported by the funding required to hire and retain skilled employees.

It's important to note that you don't have to be a startup to utilize crowdfunding. Established businesses can also seek funding, and often, more mature companies attract greater investor interest.

Although navigating the crowdfunding process can be intimidating, many platforms offer comprehensive support, assisting with SEC compliance, financial documentation for potential investors, and all necessary elements for launching a successful crowdfunding initiative.

If you're a small business owner in need of capital, consider crowdfunding as a viable alternative to traditional business loans or grants. While you will be sharing equity in your company in exchange for necessary funds, this approach could propel your business to new heights.

To get started on raising capital, explore StartEngine. This platform boasts over 270,000 investors and has successfully raised more than $500 million, making it the largest crowdfunding platform in the United States.

The first video, "How do I raise £200k from private investors," provides valuable insights on securing investments from private individuals. It covers strategies and tips that can help you effectively pitch to potential investors.

Chapter 2: Exploring Crowdfunding Opportunities

The second video, "How To Get $150K In Business Credit With A New LLC 2023," discusses the steps to obtain business credit for new LLCs, offering strategies tailored for 2023's financial landscape.

Sandy Ingram, also known as C. Ingram, is a Registered Tax Professional with the Department of Treasury since 1999. She is the creator of the Edu Matrix channel, where she shares weekly insights on exotic currencies, affordable investments, and equity share investment tips.