Edited by Sabri Boubaker, Douglas Cumming and Duc K. Nguyen
In May 2016, Regulation Crowdfunding gave startups and other companies the opportunity to access relatively small amounts of capital from public investors around the United States. This introduced a new avenue through which companies could raise money, different from restrictive bank loans and from large-scale public offerings. With issues limited to $1 000 000 and with investors limited to $10 000 each, this opportunity was unique in at least two ways. First, the small size of the offerings means that the greatest benefit will be for small, startup or non-traditional companies that may not have access to more traditional forms of capital. Second, the low investor limits indicate that much of the capital will come from crowds of relatively small retail investors and not from large foundations or institutional investors. The power of these crowds – large groups of individuals aligned by a purpose and connection to a cause – makes this investment opportunity different from existing opportunities. Because these crowds are aligned by common desires and goals, social enterprises have a unique opportunity to connect with the crowds and to access capital that might not otherwise be available to them if they weren’t focused on mission and impact. Regulation Crowdfunding provides the ideal platform for social enterprises to access capital they can use to scale their mission and operations and maximize the impact they make.
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