For All Investors (Under Title III of the JOBS Act)
Steve Wozniak designed the Apple II computer in 1976. He recently pointed out that if you had asked people in 1976 if they would like to have a home computer, most would have responded, “What's a home computer?”
Today if you ask most people if they would like to invest in startups and small businesses through equity crowdfunding, they would respond in much the same way: “What's equity crowdfunding?”
Are we implying that in a decade or two most people will know what equity crowdfunding is and might even want to buy some early-stage equity? Yes. Everyone who has an investment portfolio will seriously consider diversifying by investing hundreds or thousands of dollars in startups and early-stage companies via equity crowdfunding.
Since 1976, personal computers have dramatically improved and expanded with respect to power, user-friendliness, and functionality. Wozniak himself could not have fully envisioned how home computers would change most aspects of commerce and society. We want to be careful not to paint a grandiose portrait of equity crowdfunding, but to extend our analogy, equity crowdfunding will likewise improve and expand, and change private capital markets, in ways that we can't yet envision, even if it gets off to a slow (maybe rocky) start.
To understand equity-based crowdfunding, it helps to understand some of the basics of Regulation D offerings, which we looked at in Chapter 2—especially ...