NEW YORK CITY-In my previous Globest.com article, I defined crowdfunding as the collection of funds from multiple parties to finance a particular project or venture. I concluded by stating that technological and social pressures gradually rendered the regulatory regime from the 1930s obsolete and impractical. This forced the SEC to relax its once black-and-white advertising restrictions and turn them into a gray mess of guidance.

In 2012, Congress recognized this problem and finally put an end to the old advertising restrictions for private deals and created a regime for “crowdfunding.” The new regulatory framework would empower market participants on both sides of the equation, thereby providing much-needed relief to startups and smaller investors alike, removing some of the old barriers to entry and access to capital.

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