Crowdfunding has been around for quite some time. But equity crowdfunding is a completely different approach in the sense that it is. With sites like Kickstarter you basically make a contribution to the company or person that is offering the service. In spite of the promise of an award, there is no legal obligation for the issuer to deliver that to the person who makes the donation.
In Equity crowdfunding, you take an interest in the project and this could be in the form of equity or debt, or something else based on the arrangement that the contract. You can also know more about property crowdfunding via crowdfunding-platforms.com/real-estate-crowdfunding.
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It's basically the same as pooling funds to invest and is covered within the strict regulations the local regulator of securities provides for investment opportunities. The main difference is in the delivery system (online) and the user experience, as well as the ease of use. It is the most straightforward of all, and is commonly employed for joint ventures and private transactions.
Rule 20-12 states that you can raise as much as 2 million from up to 20 investors from retail. The retail investor is simply any person who isn't a wholesale investor. The wholesale investor is an individual who has earned at least 250K per year over the past two years or who has 2.5M worth of wealth.
This is a generalization but there's more to it, however, the basic idea is that it's someone who's extremely wealthy. The government believes, and quite rightly to ensure that people who have done their best on their own and have become informed of the intricacies of their lives can access deals without any obstacles.