Equity crowdfunding is a new innovation in early-stage company financing. It allows start-ups and growing companies to effectively conduct “mini-IPOs,” offering shares to the members of the general public, under a reduced disclosure regime and in lieu of issuing a full prospectus—a document filed with the SEC that outlines a company’s financial health for potential investors.
Different regulators in different countries have taken different approaches to equity crowdfunding, with varying effects on the development of each of their respective financial ecosystems. Some countries have taken very liberal approaches to equity crowdsourcing, while others are very protectionist.
