Legislation that would allow companies to raise capital online in increments of up to $10,000 per investor sailed through the House in early November by a 407-17 vote. But the momentum to allow so-called “crowd funding” has slowed considerably in the Senate, as lawmakers mull whether unsophisticated investors are vulnerable when capital formation occurs online.
Alan Rich, a money manager with Cantella & Co. Inc., embraces the crowd-funding concept.
“There's a huge need for it,” said Mr. Rich, who pointed out that entrepreneurs are being shut out of traditional capital sources. “Banks aren't lending money. They make it very difficult for small startup ventures to get anywhere.”