Startup companies looking to raise money can do so from almost anyone with available cash thanks to a new set of JOBS Act rules that took effect Monday.
The new regulations allow companies to raise up to $1 million from non-accredited investors in exchange for an equity stake in the company. Previously, only accredited investors — those with at least $1 million in net worth (excluding the value of their primary home) or an annual income of at least $200,000 — could get in on the action.
Under the new rules, investors will be able to:
- Invest $2,000 or 5 percent of their annual income or net worth, whichever is greater, if both their annual income and net worth are less than $100,000.
- Invest 10 percent of their annual income or net worth, whichever is greater, if either their annual income or net worth is equal to or more than $100,000.
The new rules are designed to help boost investments and get more people involved with startup investing.
Read more: St. Louis Business Journal