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The New Crowdfunding Rules: Will They Really Help Startups?

Hailed as the true democratizer of private investment, crowdfunding has been attracting both headlines and a fast-growing pile of cash. In May of 2016, rules from the Securities and Exchange Commission went into effect that will democratize the process even further.

These new rules will open the doors to more investors, but they also pose some significant challenges for entrepreneurs seeking to safely tap this expanded source of financing. That means startups need to do their homework to avoid potential problems that range from complicated filing requirements to future barriers to financing.

The genesis of these rules was the Jumpstart Our Business Startups Act of 2012, which was intended to help smaller companies raise capital

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