On October 30, the Securities and Exchange Commission in the United States voted to implement Title III of the Jumpstart Our Business Startups Act, or JOBS Act. Adopting Regulation Crowdfunding under Title III of the JOBS Act gives non-accredited investors access to equity and debt crowdfunding in privately held companies, transacted via online platforms.
According to the official release from Crowdfund Intermediary Regulatory Advocates (CFIRA), “Title III is positioned to spark major changes in the American economy, provide unprecedented opportunities for businesses and increase the number of potential startup investors in the U.S. from 3.5 million to 233.7 million.” These changes will open the door for new investors, as well as provide start-ups with broader access to capital in order to grow their businesses.
These changes are opening a new capital market for both investors and business owners. Equity crowdfunding allows average citizens to invest in private businesses, while it lifts one of the biggest barriers start-ups face—accessing capital—when trying to grow their businesses.
We saw similar regulatory changes, in Canada this past May, when six provinces approved the start-up crowdfunding exemption, and we continue to see forward momentum in North America’s crowdfunding regulations. Alberta and Nunavut also recently proposed a new start-up business exemption, and Ontario recently finalized their offering memorandum exemption, further demonstrating North America’s shift to a democratized capital market.
FrontFundr is excited to be a leader of the new capital market in Canada and is in support of these new crowdfunding regulations, which enable start-ups to raise capital from a much larger investor base. Provided there is transparency and high levels of disclosure to inform participants of the risks and rewards of making investments, we view the new regulations as positive changes for both investors and start-ups.
For a listing of the latest prospective companies hoping to raise funds through FrontFundr using the new exemptions, visit our Prospect Lounge, or visit Pitch Place for those who are actively raising funds. To learn more about the regulations that pertain to investments through FrontFundr, visit our Investor Concierge.