If you haven’t been paying attention, the JOBS Act could pave the way for low-budget films to raise money from normal folks in small increments – like the way our graphic novel R.E.M. raised money for printing through Kickstarter.
But the SEC will make sure this is not the wild west. Right now, they are weighing the language and here are some key points to consider:
- Maximum aggregate raise is $1 million over a 12-month period.
- Investors whose annual income and net worth are less than $100,000 can only invest up to $2,000 or 5 percent of their annual income or net worth, whichever is greater,
- Investors whose annual income or net worth is equal to or more than $100,000 can invest up to 10 percent of their annual income or net worth, whichever is greater.
- Crowd-funding will only be permitted through an SEC registered intermediary, either a broker dealer or a “funding portal” overseen by the Financial Industry Regulatory Authority (FINRA). Because up to 100 brokers and portals could initially seek to enter the space after the rule is adopted, it is likely the SEC will take its time and that the first non-accredited investments wouldn’t begin until the second half of 2014. At the earliest.