Startup Founders Can Now Bypass Venture Capitalists with Crowdfunding

This week Protocol.com's "Source Code" newsletter described how startup founders could now bypass venture capitalists:. Last fall, the the U.S. Securities and Exchange Commission passed a new set of rules for "exempt offerings," which allow startups to raise funds by selling securities. The SEC acknowledged that its exempt offering rules had become "overly complex" and tried to make them simpler to understand. The new rules increase the amount of money a startup can raise through regulation crowdfunding, which works like ordinary Kickstarter-style crowdfunding but involves selling equity instead of products and thus comes with many more rules attached (though not nearly as many as would apply to your average public company). Reg CF, as it's known, used to allow a company to sell a maximum of only $1.07 million in securities every year. Starting Monday, that number jumped to $5 million a year.