Federal Rule Change Could Help Startups Find Local Investors

A recent Associated Press article by¬†Cara Lombardo indicated that, “Startups across the country could soon get a boost thanks to changes in federal rules that will make it easier for them to find local investors.

“In the past five years, more than 30 states have legalized state crowdfunding, an offshoot of equity crowdfunding that allows small companies to sell stock but limits the sales to residents of their own states. Fewer than 200 companies have tried it, partly because most are prohibited from sharing links to their crowdfunding campaigns on social media, crowdfunding’s primary fuel.”

The AP article added that, “Supporters of state crowdfunding say part of the appeal is that local investors can help grow local companies. But it’s risky for investors since many startups fail.”

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