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Crowdfunding

In: NEW METHODS OF FINANCING YOUR BUSINESS IN THE UNITED STATES A Strategic Analysis

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  • Frederick D Lipman

Abstract

Crowdfunding is a financing technique that uses online social networks linked to a web internet-based platform to raise capital. In this chapter, we will discuss so-called “retail crowdfunding.” This involves using social networks to raise capital from the general public either without selling any investment securities or, effective May 16, 2016, by selling investment securities to both non-accredited investors as well as accredited investors pursuant to a registration exemption contained in Section 4(a)(6) of the 1933 Act. In the next chapter, we will discuss crowdfunding as well as other marketing methodologies which permit sales of investment securities solely to accredited investors pursuant to a registration exemption contained in Rule 506(c) under the 1933 Act (so-called “non-retail crowdfunding”). In contrast to retail crowdfunding discussed in this chapter, Rule 506(c) permits unlimited amounts of funds to be raised but limits sales solely to accredited investors…

Suggested Citation

  • Frederick D Lipman, 2016. "Crowdfunding," World Scientific Book Chapters, in: NEW METHODS OF FINANCING YOUR BUSINESS IN THE UNITED STATES A Strategic Analysis, chapter 1, pages 3-33, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9789814632652_0001
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