In practical terms, according to lawyer Michael S. Harrington, crowdfunding comes with requirements that make it “an expensive and time-consuming process.” For small companies, the capital may be too expensive.
And for large ones that need more funding as time goes on, a start-up pharmaceutical company, for example, the $1 million per year restriction may be prohibitive. Another complication for getting additional funding is that crowdfunding creates a relatively large number of shareholders, which venture capitalists feel is a handicap for a company, according to Harrington.
Tags: crowdfunding, crowdfunding-law, crowdsourcing, funding, investorsm-entrepreneurs, jobs-act, michael-s-harrington, sec
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