5/30/2023 0 Comments Kickstarter vs gofundme![]() ![]() ![]() Under the Securities Act of 1933, the offer and sales of securities requires either registration or an exemption from registration. The most recent development in the “crowdfunding” universe is the adoption by the Securities Exchange Commission (SEC) of final rules allowing equity crowdfunding from nonaccredited investors. Within these categories, multiple models and platforms exist for connecting fund-raisers and potential contributors, and new models will no doubt continue to be created as the concept of “crowdfunding” continues to grow in popularity. These crowdfunding models fall into two overarching categories: donation models, where the contributor is donating money to projects with no expectation of return, and equity models, where the contributor is investing money in exchange for equity or debt securities in the company. The devil is in the details, however, and a variety of different models and platforms have appeared creating different ways of achieving a company or individual’s fund-raising goals. The term itself simply means raising money from a potentially unlimited number of people over the Internet. The reason for this is most likely due to the fact that “crowdfunding” is an umbrella term used to describe a wide range of fund-raising activities. While “crowdfunding” has become an incredibly popular means of raising money for everything from artistic projects to lifesaving medical care, the concept is also widely misunderstood.
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