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.

What are the two main types of crowdfunding mentioned in the text?

Explain how donations in crowdfunding can be structured as a pre-selling platform.

What is equity funding in the context of crowdfunding?

What are the limitations for a business selling securities through crowdfunding?

Describe the role of the SEC in crowdfunding transactions.