While nearly everyone has heard of crowdfunding, the concept of equity crowdfunding is not as well known. For those Chicago business owners that are new to this developing area, prior to May 2016, crowdfunding was available only to accredited investors or those with an annual income of at least $200,000 or a net worth of more than 1 million, not including the value of a primary residence. Although the 2012 federal Jumpstart Our Business Startups Act (JOBS) provided for non-accredited investors, the Securities and Exchange Commission (SEC) did not authorize equity crowdfunding to begin until May 2016.
Since that time, Article III of the JOBS Act has seen 49 successful offerings with 11.5 million dollars committed according to a November 17, 2016, Forbes report on the state of equity crowdfunding. While the report suggests that the large majority of startups are not yet using non-accredited crowdfunding under Title III, it is anticipated that equity investment platforms will see tremendous growth moving forward.