Kickstarter and other sites allow artists, authors, and inventors to fund projects through small donations from many supporters. But soon people may be able to actually invest — and see a return on that investment — through a similar model.
The Securities and Exchange Commission is considering rules that, for the first time, would allow small companies to solicit investments over the Internet and sell shares to the general public.
Currently, private companies are only allowed to solicit funding from accredited investors — essentially wealthy people with a net worth of $1 million, excluding their homes. But the new rules would allow companies to raise as much as $1 million a year from lower net worth people by selling shares.
These investments could return great rewards to the businesses’ crowdfunders, but they could also fail.
Today’s Question: Do you want to see the role of crowdfunding in the economy expand?