One thing that separates our businesses from traditional “start-ups” is funding. We “fund” our businesses through savings accounts, liquidated 401Ks, credit cards, day jobs, and sweat equity. Mine was mostly the latter.

But what if you had access to investors beyond friends, family, and your Priceline Visa with William Shatner on it?

This exists to an extent in crowdfunding platforms like Kickstarter and IndieGoGo. However, in these platforms, the people giving the money are just “givers” not investors. Money is given like gifts with neither a tax deduction nor a stake in the business.

According to Annie Lowry at, micro-investing is currently disallowed by SEC regulations. So while Kickstarter’s model is completely legal, creating a crowdinvesting platform would be illegal:

True crowd funding is different, because it would enable investors to become partial owners of the business, not just lenders. Under current law, that is often illegal. A longtime Securities and Exchange Commission rule, designed to protect unsophisticated investors, limits the number of stakeholders certain private companies can have.

If you hit 500, you often have to go public. That means opening your books to additional scrutiny and your business to the whims of the market. And being public is just not a feasible option for a tiny business looking for start-up funding. Thus, an artist can receive thousands of $5 donations on a site like Kickstarter, but an incorporated farmer cannot accept investments from thousands of interested small-timers.

What if this were different?

The now-dead American Jobs Act proposes making a change to this regulation so that businesses could responsibly gather small investments totally up to $1 million.

How would your business be different if you had $1 million available to you?

As a business owner…

  • Would you dream bigger if you had access to capital?
  • Would you operate your business differently if others were literally invested in your business?

As an investor…

  • Would you be more or less inclined to give money if your dollars were an investment and not a donation?
  • What kind of risk would you be willing to take on?

Considering changes to regulations like this is New Economy thinking at its best. But we need to thoughtfully consider how we would approach an emerging opportunity like this.

I want to know how this would change the game for you either as an investor or a business owner (or both!). Leave your response below!