Crowdfunding - Explained

The video tutorial explains two types of crowdfunding: donations and equity funding. Donations involve asking for money in exchange for privileges, while equity funding involves selling ownership interest in a company. The focus is on equity crowdfunding, which requires compliance with SEC regulations. Businesses must adhere to specific rules and exemptions to avoid the arduous registration process. Key limitations include a $5 million cap on securities sales and restrictions on non-accredited investors. The process must be conducted through approved platforms, and securities are restricted from resale for 12 months.

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