Inexpensive way to make and to take investments in America

"The new rules allow companies to raise up to $1 million in a 12-month period through a crowdfunding campaign. Companies will need to provide their potential investors with financial statements, but some first-time issuers and those seeking less than $500,000 will not be required to have the statements audited — an important concession for those concerned about the cost of providing audited financials.

Companies will be able to advertise their offerings in a variety of ways, including posting them on Kickstarter-like portals for investors to peruse. (Kickstarter has said that it is not interested in expanding into equity crowdfunding, though one of its top rivals, Indiegogo, said it is considering doing so.)

Dozens of investment portals have sprung up in recent years, but until now, only accredited investors — those with an annual income exceeding $200,000 or a net worth of at least $1 million — have been permitted to invest in most of the deals advertised on them.

Some of those portals now plan to expand into the nonaccredited market. SeedInvest, a site that has helped 50 funding deals in the last three years, expects to begin offering deals next year to a wider pool of investors.

The amount of money backers will be allowed to invest depends on their income. Those with an annual income or net worth of less than $100,000 will be allowed to invest up to $2,000 in a 12-month period, or 5 percent of the lesser of their income or net worth, whichever is greater. Those with an income and net worth of more than $100,000 will be permitted to invest up to 10 percent of the lesser of their annual income or net worth.

The equity shares they buy will be risky, illiquid investments. Investors will generally be required to hold on to the shares for at least one year, and there are not yet many marketplaces for those seeking to sell shares in private companies, which are difficult to value."