Every time a company like Facebook or Twitter goes public, we hear stories about newly minted billionaires who invested small amounts of money in the early days. And we get envious. Not so much of the other guy's fortune, but because we never had the chance to invest. That's all changing. Last month the SEC ended a decades-old ban on general solicitation by private issuers, which means that tech startups now can advertise to investors.
Not surprisingly, they've taken advantage of the newfound freedom. On the popular AngelList site, more than 1,100 companies began publicly fundraising within 24 hours of the rule change. Right now only so-called accredited investors (i.e., rich folks) can buy shares, but the same federal law that prompted the SEC action also contains an equity-based crowdfunding provision for the rest of us. By this time next year it is expected that all Americans will be able to invest in ventures that previously were the old-boy network's exclusive domain.