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SOMETIMES revolutions have small beginnings. SeedInvest is a three-year-old company with 20 employees sharing space in a second-tier building near Wall Street. But it has positioned itself to be at the heart of a fundamental change in America’s capital markets.

On June 19th Title IV of the JOBS (Jumpstart Our Business Startups) Act of 2012 goes into effect. It will change how small companies raise money. Those seeking $20m-50m will be able to offer their shares to the public while skipping some of the most costly regulatory requirements that normally involves, including being vetted by state officials, issuing quarterly reports and listing their shares on an exchange.

In the past, firms that did not meet those requirements could only raise money from investors with a net worth in excess of $1m or $200,000 in annual income. Ten thousand people who did pass that test have signed on to SeedInvest’s system. With the lifting of the rules on income, any adult American can now invest in small share offerings, according to Ryan Feit, SeedInvest’s chief executive.

A wide...

from The Economist: Finance and economics http://ift.tt/1QteIXR