A tremendous amount of excitement can be seen in the market regarding crowdfunding these day sand rightly so.It has placed the power to invest petty cash in businesses, startups and real estate, something which was nothing less than a dream to many just a few years back. SEC has made it possible for new startups to raise money by the way of issuing a share of their company to the retail investors.
Crowdfunding has gone from something of an anomaly to an entrenched device for an assortment of business people and craftsmen, from prepackaged game architects to online video designers to coordinators of magnanimous causes. In any case, while crowdfunding is basic, it has still to a great extent been confined as far as blessings or gifts; members regularly get “advantages,” including insider data, swag or early duplicates of the item being financed, however no commitment to a Kick starter battle has ever been an interest in any customary sense.
Investors are, however, forbidden to a maximum limit of 5% of their net worth or $2000 whichever is greater, if their net worth is less than $100,000. For those with a higher net worth can invest up to 10% of their net worth, maximum limit being $100,000 annually. A similar ceiling is also placed on the startups raising money. They can extract the maximum of 1 million dollars in a year. However, organizations looking for more than this, can do so provided they reveal their audited financial statements by an independently operating accountant.view more tips from http://www.theguardian.com/business/2016/feb/19/barclays-boss-of-investment-banking-arm-to-leave
There is also a healthy amount of risk that all this might prove to be fatal for some investors as crowdfunding is the new fad and everyone is talking about it, and novice investors could easily make the mistake of being married to a single company, or two at best, joining the bandwagon, hoping that somehow it will turn their fortune wheel. The truth however is that more than half of the startups fail, maybe even more than that, same reason why they fail to impress Angels.
Companies which seem like the next big thing might just fail due to a bad word from an unsatisfied customer, you never know what goes viral these days. This is a reason why it is very risky to place all your eggs in one basket.
High net worth investors who are serious in investing and believe in a rigorous due diligence before zeroing on a project might not be affected. The others for whom crowdfunding looks like a glimpse of hope, those who are desperate to plough some extra cash lying around or the ones who just trust what others say, can land into a bad situation.checkout website! SEC is definitely going to watch over all the online traffic and monitor the activities of the companies benefiting from this, the online portals that act as platforms and the investors, however only time will tell how strong the governing body proves to be.