Crowdfunding allows entrepreneurs to circumvent the institutions of finance to raise money to fund their dreams. It is a democratization of the fundraising process. As of May 16, crowdfunding is becoming more democratic on the investor side, too.
Equity crowdfunding, in which entrepreneurs raise cash by selling a piece of their company, has historically only been open to accredited investors, or those investors who meet certain levels of wealth. In this second episode of Crowdfund with Cat, Alon Hillel-Tuch, a co-founder of the crowdfunding platform RocketHub, explains that as of May 16, a law change will mean that everyone can potentially be an investor in equity crowdfunding. Anyone with the cash and the interest will be able to invest in startups.
Hillel-Tuch walks us through what the change means and how it will affect the startup finance landscape.
For more on the rule change and how entrepreneurs and investors should prepare, check out our series of written stories on equity crowdfunding (linked to below).