What is Equity Crowd Funding?

Equity crowd funding is an exchange of stock, units, or other form of ownership transfer exchanged for a capital investment. Equity crowd funding campaigns are subject to State and Federal securities laws which remain currently undefined by the Federal Government leaving risk in the equation for both parties. The Entrepreneur is stating a value which is often hard to quantify in exchange for capital from accredited and non accredited investors. The stock only has value if an exit strategy is clearly defined and executed otherwise investors are buying phantom stock with the expectation of liquidity in the future. People investing in equity campaigns should view the transaction as a loan to a friend that you may never see a return on to avoid disappointment should the venture fail to produce the promised results.