# Plain Language Summary: Improving Crowdfunding Opportunities Act

This bill makes it easier for small companies and startups to raise money from regular people through crowdfunding platforms online. Right now, companies that want to raise money through crowdfunding have to follow complicated rules that vary from state to state, which makes the process expensive and time-consuming. This bill removes those state-level barriers so companies only have to follow federal rules, making it simpler and cheaper for them to get funding.

The bill also protects crowdfunding platforms (the websites that host these fundraising campaigns) from being held legally responsible for false information posted by companies, as long as the platform itself isn't knowingly lying or committing fraud. This gives these platforms more confidence to operate without fear of lawsuits. Additionally, the bill exempts crowdfunding platforms from strict financial reporting requirements that normally apply to banks and other financial institutions, which reduces their operating costs.

The bill makes several changes to help more people invest in crowdfunding campaigns. It increases the maximum amount a company can raise from $1 million to $10 million, and it changes how much individual investors can put into these campaigns. Instead of being limited to $100,000 per year, investors would be limited to 10 percent of their annual income or net worth—whichever is higher. This means wealthier investors could put more money into crowdfunding opportunities. The bill also allows smaller companies raising between $124,000 and $250,000 to use financial statements certified by their own executives instead of requiring expensive independent audits, making it more affordable for them to comply with regulations.

Improving Crowdfunding Opportunities Act

McHenry, Patrick T.

Improving Crowdfunding Opportunities Act This bill reduces regulations applicable to crowdfunding securities and portals. Crowdfunding is used to raise capital through a large number of individuals investing potentially small amounts of money. The bill exempts certain securities issued under crowdfunding regulations from state regulation of secondary transactions. It also exempts crowdfunding portals from (1) certain anti-money laundering reporting and recordkeeping requirements, and (2) liability for material misstatements or omissions unless the portal knowingly makes certain untrue statements or engages in fraud or deceit. The bill revises the disclosure requirements for crowdfunding issuers with specified target offering amounts. The bill also expands the types of investors allowed to invest in these companies to include investment companies. Finally, the bill increases the aggregate amount these companies are allowed to raise in a 12-month period and generally raises the amount individuals are allowed to invest in a 12-month period.