Crowdfunding for Internet Stock Sales Approved by SEC
- Small businesses are limited to raising $1 million annually
- Agency removes requirement for audited financial statements
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Startups and other small businesses will be free to raise money by selling stock over the Internet under new rules adopted by the U.S. Securities and Exchange Commission.
Equity crowdfunding standards approved by a 3-1 vote Friday lay out how such firms can raise as much as $1 million annually by offering shares to investors online. The funding model is based on platforms such as those developed by Kickstarter PBC and Indiegogo Inc. that allow entrepreneurs, artists and engineers to solicit donations for projects ranging from virtual-reality headsets to music festivals.