Investment Crowdfunding

INVESTMENT CROWDFUNDING

Investment crowdfunding is a way to source money for a company by asking a large number of backers to each invest a relatively small amount in it. In return, backers receive equity shares of the company. Normally restricted to accredited investors, the 2012 Jobs Act in the United States allows for a greater scope of investors to invest via crowdfunding once better infrastructure is in place to do so. Investment crowdfunding may also entail obtaining debt as well as equity stakes.

Source: Investopedia