Equity Crowd Funding now approved by Israeli Government.
The new regulations approved by the Israel Securities Authority (ISA) will enable small startups to raise capital from the public, without the regulatory red tape and visibility that is normally related to a public offering. Similar models exist in the US and the UK.
There will be no limitation on number of investors or minimal investment, there is limitation on the maximum round size at 6M ILS per year.
The Fiscal Committee of the Knesset approved on March 20th 2017 the equity crowd funding regulations that the ISA led to encourage public investments in high tech startups.
To avoid big public monetary loss, each investor can invest a small amount, normally 10,000 ILS to 20,000 ILS in total per year, according to their income. Accredited investors can invest without limitations. Both stocks and bonds could be offered to the public, and the companies will have to publish their financial statements and update their investors periodically on progress. These new regulations are an amendment to the law from 2015 that approved internet based crowdfunding platforms.
This is nothing less than a revolution for Israeli startups looking to raise capital. VCs and traditional investors can only invest in so many companies in terms of volume and type, with limitations of their fund size, their criteria and their expected returns. Therefor thousands of Israeli startups are left without proper funding to help them grow and succeed. This financial gap can now be closed by the public that will help boost the economy and will have a chance at financial gains (or loss).
VCforU.com is supportive of these new regulations and is looking to play a role in helping companies succeed in raising capital, equity crowd funding included.
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