Raising money, something I have done successfully and not, is hard. Most people give up. I know I have.
It’s a skill set which most of us do not have.
What this law does is make it less expensive to offer securities to a larger pool of potential investors. The fact remains that those getting in early, should be subsequent rounds, will get terribly diluted.
On the other side it creates a standard set of deliverables which is good.
But the numbers dont make sense, up to 10% of your income, assuming earning of $100,000, this means you can invest, $10,000. So if you want to raise $1mm, you need 100 $100,000 earners to accomplish your raise. Will crowd sourcing work with these numbers? I dont know. More likely investors would like to spread their bets, so if the $100,000 income investor invests $1,000 in 10 deals now you are looking at 1,000 investors.
People invest because others invest, People this both know, have heard of and respect. Conventional friends and family rounds usually start with one investor who then gathers the others. They respect this individual and dont want him or her to be the only one to make money. Its fear and greed. That is their sole due diligence.
In the mid 1980′s I had just such an investor. He was one of the wealthiest men in NYC. He was a friend of a friend. He agreed to put up $100,000 and to get nine of his friends to do the same. Then he died before we could move the deal forward. Such is life, We all die.
Here is mashable link to crowdsourc financing goal accomplishment.
http://mashable.com/2010/06/21/crowdsource-funds-causes-startups/