TECHNOLOGY ENABLED ANGEL INVESTING
Over the last few years, the US has worked towards making it easier for the broader population to invest in small businesses in order to democratize start-up investing beyond organized VC funds and accredited angel investors. This has seen the passing of the “Jumpstart Our Business Start-ups Act” or JOBS Act. First signed into law by President Obama in 2012, the act continues to be made into law as the SEC reviews and releases additional components of regulation. The JOBS Act as originally passed would, among other things, do the following:
Allow for an increase in the number of shareholders a company may have before being required to register its common stock with the SEC and become a publicly reporting company.
Provide an exemption from the need to register public offerings with the SEC that would allow the use of Internet funding portals, including “equity crowdfunding platforms” (with certain limits on how much an investor can invest through these portals).
Create a new definition of “emerging-growth companies” as those with less than $1 billion in revenues.
Relieve these companies from some regulatory and disclosure requirements when they go public.
Lift the ban on “general solicitation” and advertising of specific kinds of private placements.
Crowdfunding might be a good way for you to dip a toe into being an investor in early-stage technology companies. The advantages are that you can make very small investments, don’t need to do your own extensive due diligence, and can, as a result, build a large diversified portfolio quickly.
Fifth Era manages an AngelList syndicate and posts the details of the companies it is investing in to that syndicate in those cases where the company still needs to raise additional capital. If you are an accredited investor please back our syndicate to see the companies without a commitment to invest.