Startups and Crowdfunding Limits: SEC Rule Changes Explained

Startups have new rules governing—and boosting—how much capital they can raise through crowdfunded stock sales.

The Securities and Exchange Commission updated this month its securities offering exemption rules—on how companies win exemptions from registration requirements when selling securities outside public markets—to address complaints that they’re too complex and cumbersome.

Smaller businesses can now earn millions of dollars more through crowdfunding without undergoing the SEC’s registration process. The agency is also hoping to give individual investors opportunities to take bigger bites out of some offerings.

1. What are the biggest changes?

One of the most talked-about rule tweaks eases startups’ attempts ...