While the concept of crowd-sourced fundraising is known to have been employed as early as 1884 — when Joseph Pulitzer launched an effort raising more than $100,000.00 in six months to build the pedestal for the Statue of Liberty — the term “crowdfunding” is of relatively recent origin…and the phenomenon is pandemic. Some crowdfunding platforms are limited to their country of origin only; others are international in scope. What they have in common is that they allow entrepreneurs to obtain start-up money as the result of small investments from many people, rather than by following the more conventional route of seeking out private investors and/or venture capitalists.
Increased regulation of this investment strategy comes into play with equity crowdfunding, which can include ownership interest in a given business and sale of securities (such as shares of stock), and which can enhance economic development to a greater extent than non-equity crowdfunding. In October of 2015 the SEC adopted rules permitting crowdfunding. A qualified attorney can help navigate the legal aspects of investment in equity crowdfunding platforms, once SEC and North Carolina regulations are firmly in place.