The proposed SEC regulations on crowdfunding offer a unique viewpoint on investor protection.
Limits on Investing
If the investor has an income or net worth of less than $100,000, he can only invest $5,000. If income or net worth is over $100,000, then the investor can invest 10% of annual income or net worth, to a maximum of $100,000. The investor need not verify his income or net worth.
Portals are not allowed to recommend deals or give investment advice.
The company can only raise up to $1 million per year. If the company raises $500,000, audited financial statements are required. Companies raising smaller amounts have to share financial statements and income-tax returns with investors.
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