Bay Area Startups Await Crowdfunding Regulation

This article comes to us courtesy of The Bay Citizen.

By Matt Drange

How much online advertising is too much?

That's one of the questions before the U.S. Securities and Exchange Commission as it finalizes regulations to let companies to raise money from investors through crowdfunding.

The advertising regulations are one of a slew of issues the SEC must address in order to implement the federal Jumpstart Our Business Startups (JOBS) Act, which includes a provision that will allow startups to raise money by selling shares to investors through websites known as funding portals.

The JOBS Act, signed by President Barack Obama in April, attempts to adapt the popular idea of Internet crowdfunding to the sophisticated business of selling securities.

The SEC's rules are eagerly awaited by some high-tech and financial startups in the Bay Area, which would be able to sell shares without restrictions enacted over the years to protect naïve investors from throwing their money away.

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