Crowdfunding raises start up capital on Internet

His Minneapolis start up company, SmarThings recently raised more than $1.2 million on the crowdfunding site Kickstarter.com. Crowdfunding is a way to reach financial supporters on line and encourage them to invest in a start up company. Last year, almost $1.5 billion was raised by 452 crowdfunding web sites. Kickstarter.com remains the largest having raised over $345 million for artistic enterprises. This year, it will outstrip the National Endowment for the Arts in capital distributions. The Security and Exchanges Commission is expected to release a ruling in January which could cause crowdfunding to explode. The ruling would allow U.S. companies to raise up
to $1.0 million via crowdfunding from small investors who have not been allowed this vehicle due to concerns of fraud. This will change their status from "donors" to co-owners.