When the JOBS Act was signed into law in April, it legalized the concept of “crowdfunding.” This idea allows startups to solicit the general public for investments as opposed to going through investors and traditional banks.
A new startup called Fundable launched recently in an effort to take advantage of this now permitted activity. As Wil Schroter, the company’s CEO and Co-founder, explained to us, Fundable opens the door for serious startups to raise money from anyone willing to support their initiative.
Fundable is, however, different from companies such as Kickstarter since it gives startups more options for raising money. Not only can startups raise money through rewards, but those that need larger investments can also receive backing by offering equity in their companies.
According to Schroter, “crowdfunding” creates valuable opportunities for businesses. He believes that access models such as Fundable could as much as double the number of startups that begin in the U.S. each year, which could also greatly boost the economy.
Since the SEC is still reviewing the JOBS Act, Fundable is only able to work with accredited investors. It is confident though that the SEC will extend its approval to non-accredited investors as well.