Crowdfunding became an amazing tool for entrepreneurs to launch new products – we all heard of the Pebble Watch with over $10 million raised in 37 days – and there are so much more. Most of the current crowdfunding platforms are donation-based or reward-based: as a backer, you get a t-shirt, a thank you note or a product. Crowdfunding platforms worldwide have helped raise $16.2 billion in 2014. What if it was possible for you as a backer to receive a financial return?
The Title III of the JOBS Act was finally approved on October 30, 2015, allowing anyone in the US to invest in companies using regulated crowdfunding without being an accredited investor (accredited investors have yearly income exceeding $200,000 or net worth above $1 million). Accredited investors constitute only 3% of the US population, 97% of Americans are now empowered by the new legislation. These rules should go into power in May 2016 – let’s hope there will be no delays as the Act itself took 3 years.
Meanwhile, Colorado State is ahead of national legislation, and the Colorado Crowdfunding Act was signed on April 13, 2015, allowing all Coloradans to invest up to $5,000 in local businesses within a 12-month period. StartWise is the first company to use the Colorado Act to enable ALL Colorado residents to become investors. We provide an easy-to-understand investment platform that uses crowdfunding to enable you to invest in what you know – companies that you love and products that you use: outdoor gear, healthy products, organic personal care, pet food or maybe craft beer. However, is equity the best way to invest in these companies?