Source: Radar O’Reilly, May 2011
the Sustainable Economies Law Center (SELC) in Oakland (for whom I volunteer) petitioned the SEC last year for a new exemption to cover investment offerings where individual investments are capped at $100 and the total amount is less than $100,000. The SEC posted it to their website last July 1 as File No. 4-605 (PDF).
Florida entrepreneur Sherwood Neiss also met with the SEC to promote the idea, and published a less restrictive proposal for a small offering exemption (which also cites 4-605) at his website StartupExemption.
Read also this WSJ Blog Posting
The exemption would allow start-ups to offer a return on investments raised through so-calledcrowdsourcing, where cash is typically raised through small online contributions without returns beyond a token gift, such as a t-shirt or a mug.
Sherwood “Woodie” Neiss, a Miami Beach entrepreneur who is leading the effort, says start-up investments under the plan would be limited to $10,000, or 10% of an investor’s adjusted gross income from the prior year, to keep people from “gambling their savings.”