While venture capital is highly concentrated, crowdfunding and other online tools have the potential to drive innovative funding sources to entrepreneurs throughout the American heartland. To spur more online financing activity, policymakers should:
- Create tax incentives for investors purchasing securities offered by new businesses through qualifying crowdfunding channels, with guardrails in place to ensure geographic/regional diversity in recipients.
- Improve regulatory flexibility and reduce compliance burdens in crowdfunding.
- Collect demographic information on the U.S. Securities and Exchange Commission’s Form C about the entrepreneurs whose businesses are seeking to raise capital via Regulation Crowdfunding, and report the data disaggregated by race and gender.