"Startup Investing for the Little Guy"
by Jeff Brown, Wall Street Journal
December 9, 2016
In the old days, an investor hoping to get in on the ground floor of the next Google orFacebook had a couple of options: have a friend or relative on the inside, or sign on with a big brokerage firm handling the startup company’s private placement—a sale of stock that hasn’t yet gone public.
Not anymore. Ordinary investors now can buy shares in startups that are just getting off the ground, sometimes for just a few dollars. If, that is, they are willing to take on a whole lot of risk.
It all started with the Jumpstart Our Business Startups Act in 2012. Since the act’s Title III took effect in May 2016, people no longer have to be well-to-do “accredited investors” to buy into startups.
Their stake can be as little as $10, or as much as they like, within Securities and Exchange Commission limits based on income. Investing is done through the soaring number of online “equity crowdfunding portals.” Ones that allow nonaccredited investors include Wefunder, SeedInvest and StartEngine. Well-known portals for accredited investors include EquityNet, Fundable, AngelList and Crowdfunder.
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