Below is an article by ABC News entitled “'Average' Texas investors may get new opportunities”
'Average' Texas investors may get new opportunities
By: Jason W. Wheeler, ABC News
Sep 24, 2014
Texas regulators to vote on relaxing rules that exclude small investors from taking a chance on private firms
Former Marine Matthew Harding believes he has a life-saving answer.
Harding created a new kind of gun cartridge after a close comrade was killed in training when a live round got mixed in with blanks.
Harding's Safe Tac Mag is specifically built to hold blanks, which are smaller than live ammo.
"It won't take a live round," Harding said.
His biggest challenge wasn't designing his cartridge — it was funding it.
"Bringing a product from a napkin ... you've got your engineers, your prototypes, your lawyers. The patent lawyers are ridiculous," he said. "It adds up."
As a private start-up, Harding wasn't in a position to sell traditional stock. Instead, he staked out a spot on EquityNet.com, one of a number of business crowdfunding sites.
As it stands now, investors interested in companies on the site must have relatively deep pockets. But in October, Texas regulators are expected to vote on rules that might allow all Texans — regardless of their net wealth — to buy shares in Texas-based, private companies.
It's called Title III crowdfunding.
If the rules are adopted in October, "average" investors in Texas could begin investing in such companies as soon as November.
"It's what we call the 'democratization of capitalism,'" said Judd Hollas of EquityNet.com.
Hollas said his site compiles easy-to-understand data about each company, and that all the businesses seeking investors are vetted. But — he cautions — they aren't sure bets; especially start-ups. Only about half of them survive beyond four years," he warned.
"It's high-risk," he said. "But it's also potential higher return."
Matthew Harding believes opening up crowdfunding to all Texans would be potentially great for Texas businesses, and for average investors, who have long been prohibited from taking part in many opportunities.
This article was originally published in ABC News.