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Crowdfunding: New Law Opens Opportunities, Risks

document Crowdfunding
The new JOBS Act signed by President Obama this week opens up new sources of investment for small businesses to grow, and thereby create new jobs. While much of the new law is intended to increase access to traditional sources of capital, it also unleashes a new innovation known as “crowdfunding.”
The sort of deregulation of financial markets enacted through the JOBS Act gave a number of lawmakers pause.

Although Sen. Jeff Merkley says he is pleased by the enactment of his crowdfunding amendment, last month he voted against the entire JOBS Act — including his crowdfunding provision — because of such worry.

The Senate improved investor protections related to crowdfunding, but it “did not address dangerous new loopholes in other sections of the bill. The overall package will allow companies to mislead investors, regulators and the public.”

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