--- title: What 3 New SEC Rules Mean for Investors and Businesses in the Online Private Markets description: The SEC recently announced major changes to the online private markets. Here we break down 3 rules and what they mean for investors and businesses. image: https://blog.netcapitaladvisors.com/hubfs/startup-593327_640.jpg --- [![Netcapital Advisors](https://netcapital-advisors.s3.amazonaws.com/static/img/netcapital-advisors-logo.gif)](https://netcapitaladvisors.com/) [Contact Us](https://netcapitaladvisors.com/contact) [Capital Raising](https://netcapitaladvisors.com/#CapitalRaising) [Digital Marketing](https://netcapitaladvisors.com/#DigitalMarketing) [Technology Consulting](https://netcapitaladvisors.com/#TechnologyConsulting) [Strategic Advice](https://netcapitaladvisors.com/#StrategicAdvice) [Track Record](https://netcapitaladvisors.com/#TrackRecord) [Our Team](https://netcapitaladvisors.com/#OurTeam) [Blog](https://blog.netcapitaladvisors.com/) ![](https://blog.netcapitaladvisors.com/hubfs/startup-593327_640.jpg) # What 3 New SEC Rules Mean for Investors and Businesses in the Online Private Markets November 13, 2020 [![Share on Facebook](https://static.hubspot.com/final/img/common/icons/social/facebook-24x24.png)](http://www.facebook.com/share.php?u=https%3A%2F%2Fblog.netcapitaladvisors.com%2Fwhat-3-new-sec-rules-mean-for-investors-and-businesses-in-the-online-private-markets%3Futm_medium%3Dsocial%26utm_source%3Dfacebook) [![Share on LinkedIn](https://static.hubspot.com/final/img/common/icons/social/linkedin-24x24.png)](http://www.linkedin.com/shareArticle?mini=true&url=https%3A%2F%2Fblog.netcapitaladvisors.com%2Fwhat-3-new-sec-rules-mean-for-investors-and-businesses-in-the-online-private-markets%3Futm_medium%3Dsocial%26utm_source%3Dlinkedin) [![Share on Twitter](https://static.hubspot.com/final/img/common/icons/social/twitter-24x24.png)](https://twitter.com/intent/tweet?original_referer=https%3A%2F%2Fblog.netcapitaladvisors.com%2Fwhat-3-new-sec-rules-mean-for-investors-and-businesses-in-the-online-private-markets%3Futm_medium%3Dsocial%26utm_source%3Dtwitter&url=https%3A%2F%2Fblog.netcapitaladvisors.com%2Fwhat-3-new-sec-rules-mean-for-investors-and-businesses-in-the-online-private-markets%3Futm_medium%3Dsocial%26utm_source%3Dtwitter&source=tweetbutton&text=What%203%20New%20SEC%20Rules%20Mean%20for%20Investors%20and%20Businesses%20in%20the%20Online%20Private%20Markets) [![Share on Pinterest](https://static.hubspot.com/final/img/common/icons/social/pinterest-24x24.png)](http://pinterest.com/pin/create/button/?url=https%3A%2F%2Fblog.netcapitaladvisors.com%2Fwhat-3-new-sec-rules-mean-for-investors-and-businesses-in-the-online-private-markets%3Futm_medium%3Dsocial%26utm_source%3Dpinterest&media=http%3A%2F%2Fcdn1.hubspot.com%2Fhub%2F158015%2F305390_10100548508246879_837195_59275782_6882128_n.jpg) [![Share on Email](https://static.hubspot.com/final/img/common/icons/social/email-24x24.png)](mailto:?subject=Check%20out%20https%3A%2F%2Fblog.netcapitaladvisors.com%2Fwhat-3-new-sec-rules-mean-for-investors-and-businesses-in-the-online-private-markets%3Futm_medium%3Dsocial%26utm_source%3Demail%20&body=Check%20out%20https%3A%2F%2Fblog.netcapitaladvisors.com%2Fwhat-3-new-sec-rules-mean-for-investors-and-businesses-in-the-online-private-markets%3Futm_medium%3Dsocial%26utm_source%3Demail) The online private markets have become a disruptive tool for companies of all sizes seeking funding. In 2016 the JOBS Act empowered private companies to raise capital online through Regulation Crowdfunding (Reg CF), sometimes called [equity crowdfunding](https://blog.netcapitaladvisors.com/crowdfunding-vs.-equity-crowdfunding-whats-the-difference). Four years later, companies with successful Reg CF raises have collectively pumped $1B into local economies (Crowdfund Insider).  The SEC recently acknowledged the exciting growth of the industry and announced a few key [rule changes](https://www.sec.gov/news/press-release/2020-2733). Here, we break down three of the biggest changes and what they mean for both investors and businesses. *Learn more about the online private markets at [Netcapital.com](https://netcapital.com/investors?utm_source=NCA&utm_medium=blog&utm_campaign=SEC_Rule_Change)* ## ![Money growing](https://blog.netcapitaladvisors.com/hs-fs/hubfs/money-2724241_640-1.jpg?width=600&name=money-2724241_640-1.jpg) ## Change #1: Raise Cap Increased From $1.7M to $5M per Year   ### For Businesses![Skyscrapers and a plane below a clear sky](https://blog.netcapitaladvisors.com/hs-fs/hubfs/skyscraper-3184798_640.jpg?width=300&name=skyscraper-3184798_640.jpg) If you're part of the leadership team of a business this is an **upside for you**. Previously, Reg CF, the most accessible option for private equity offerings online, had a raise cap of $1.07 million. An increased cap of $5 million for Reg CF raises allows your business to easily:  - Raise more capital  - Attract more investors  - Leverage the online private markets for later stage raises *[WATCH:](https://www.youtube.com/watch?v=sbnlw8r64DM&feature=youtu.be) Our [interview](https://www.youtube.com/watch?v=sbnlw8r64DM&feature=youtu.be) with Rob Burnett, Head of Business Development for [Netcapital.com](https://netcapital.com/?utm_source=NCA&utm_medium=blog&utm_campaign=SEC_Rule_Change), to learn more about raising capital through the online private markets* ### For Investors As an investor, this change means a **more diverse set of investment opportunities**. Thanks to the increased raise cap, more companies may be able to use Reg CF as a viable alternative to traditional fundraising methods. This includes bigger and later stage companies. ## Change #2: Investment Limit Changes for Accredited Investors & Non-Accredited Investors ### ![Accredited investor definition](https://blog.netcapitaladvisors.com/hs-fs/hubfs/social-suggested-images/3.png?width=600&name=3.png) ### For Investors The new SEC rules make it easier for investors like yourself to invest more in exciting companies. Accredited investors, which are investors making more than $200,000 annually or have a net worth of at least $1 million, no longer have an investment limit. For non-accredited investors, you can now use the greater of your income or net worth, instead of the lesser when it comes to determining your [investment limit.](https://netcapital.com/risks?utm_source=NCA&utm_medium=blog&utm_campaign=SEC_Rule_Change) ### For Businesses One of the biggest benefits of the online private market is that you’re able to expand your potential investors: from institutional investors to your next door neighbor, anyone can invest in your online offering. The SEC’s changes to investment limits will allow you to **raise more** from people genuinely excited about funding your idea. ![Team work meeting](https://blog.netcapitaladvisors.com/hs-fs/hubfs/work-5382501_640.jpg?width=600&name=work-5382501_640.jpg) ## Change #3: Covid-19 Protocols Extended ### For Businesses  The pandemic has affected businesses of all sizes. If you’re a small business hit especially hard, for the next 18 months you may be [eligible](https://www.sec.gov/news/press-release/2020-101) to raise up to $250,000 using the lowest bar of financial reporting. This means that, with no extra burden, you can [remotely raise emergency funds](https://blog.netcapitaladvisors.com/need-a-remote-way-to-raise-capital-try-equity-crowdfunding) online through the online private markets at a time when your business needs it the most.  *Interested in learning more about what Netcapital Advisors can do to help your business raise capital? [Contact us today](https://netcapitaladvisors.com/contact?utm_source=NCA&utm_medium=blog&utm_campaign=SEC_Rule_Change)* ### For Investors  There’s more than one way to support a small business. **Investing in a small business creates a new way to stay involved** in a company, product, or service you believe in. The SEC’s extended Covid-19 protocols mean that more innovative ideas have a chance to succeed and that you have the chance to get in on the ground floor. ![Yes we're open business sign](https://blog.netcapitaladvisors.com/hs-fs/hubfs/pexels-tim-mossholder-3345876.jpg?width=600&name=pexels-tim-mossholder-3345876.jpg)   With these new SEC rule changes, the online private markets have incredible potential to help more entrepreneurs thrive and give more everyday investors a chance to invest in early-stage startups. Be sure to follow our blog for updates and more information on how you can make the most of this opportunity. [equity crowdfunding](https://blog.netcapitaladvisors.com/tag/equity-crowdfunding), [startup](https://blog.netcapitaladvisors.com/tag/startup), [Entrepreneurs](https://blog.netcapitaladvisors.com/tag/entrepreneurs), [Netcapital](https://blog.netcapitaladvisors.com/tag/netcapital), [Online private markets](https://blog.netcapitaladvisors.com/tag/online-private-markets), [SEC](https://blog.netcapitaladvisors.com/tag/sec), [Accredited investors](https://blog.netcapitaladvisors.com/tag/accredited-investors), [Small Businesses](https://blog.netcapitaladvisors.com/tag/small-businesses) ![Paige Robinson](https://blog.netcapitaladvisors.com/hubfs/ProbinsonHeadshot%20scaled.jpg) ### [Paige Robinson](https://blog.netcapitaladvisors.com/author/paige-robinson) *·* Author Paige is the Assistant Content Marketing Manager at Netcapital Advisors. She is a graduate of Wellesley College, with a double major in American Studies and East Asian Languages and Cultures. Outside of her work at Netcapital Advisors, Paige pursues creative writing and keeps up with the latest cultural news. ##### Subscribe to get email updates on our equity crowdfunding blog ### Subscribe Here! # Netcapital Advisors ### We help entrepreneurs succeed. [(781) 925-1700](tel:7819251700) 745 Atlantic Ave. Boston, MA 02111 ### Our Services [Capital Raising](https://netcapitaladvisors.com/#CapitalRaising) [Digital Marketing](https://netcapitaladvisors.com/#DigitalMarketing) [Technology Consulting](https://netcapitaladvisors.com/#TechnologyConsulting) [Strategic Advice](https://netcapitaladvisors.com/#StrategicAdvice) ### Follow Us [Contact Us](https://netcapitaladvisors.com/contact) © 2020 Netcapital Advisors All Rights Reserved.