4 Crowdfunding Cautions for SmallBusinesses
NEW YORK(TheStreet)-- Small companies will soon have a new option
to obtain financing through crowdfunding, but there are some cautionsto consider.
The so-called crowdfunding term essentially means pooling resourcesor money together from a group. Under the Jumpstart Our BusinessStartups Act, or JOBS Act, small companies will have the ability to raiseup to $1 million in equity on an annual basis through crowdfunding,without having to go through the rigorous disclosure process by the
Securities and Exchange Commission
To be sure there are a host of unknown answers regardingcrowdfunding, but as more companies take to social media to tell theirstory and gain a following, the strategy could become a major player inthe alternative financing sector.