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Crowdfunding: Waiting for the Investor Pool to Deepen

Crowdfunding: Waiting for the Investor Pool to Deepen
Photograph by Gary Dickinson/Gallery Stock

Entrepreneurs rejoiced in April, when President Obama signed legislation letting small businesses solicit mom-and-pop investors for funding. Small business owners started preparing for an influx of investment. Web portals for managing the sale of shares in private companies sprung up overnight.

So far though, the results have not lived up to expectations. The Securities and Exchange Commission, which is responsible for implementing the Jumpstart Our Business Start-ups Act, or JOBS Act, has yet to enact key rules. Exasperation among entrepreneurs and the companies hoping to cash in on the so-called crowdfunding phenomenon is high. “This is the worst,” said Mike Norman, chief executive officer of WeFunder, one of the many crowdfunding portals. “To have so much of this held up is frustrating.”