The highly anticipated proposed crowdfunding regulations have been announced by the Securities and Exchange Commission. The release contains over 500 pages of regulatory goodness that only an hourly billing lawyer could love.
I doubt, however, that all the regulations will be enough to stop the fraud and waste that is likely to result from the crowdfunding initiative. This should be basic common sense, but anyone who is approached by a crowdfunding promoter should ask one basic question: why aren't real investors (venture capitalists, banks, accredited angel investors, institutions) already funding the proposal? Why is the promoter trying to persuade 1,000 people to invest $50 apiece in his or her idea, rather than asking one person with deep knowledge of the product or industry to simply write a $50,000 check? If the answer relates to a conspiracy theory among big business (as it often will) you should obviously run away from the crowdfunding promoter before he/she steals your wallet along with your investment.