Crowdfunding cap boosted by SEC, adjusted for inflation

The limit on how much individuals and companies can raise through crowdfunding has been raised 7% by the U.S. Securities and Exchange Commission.

The new rules bump up the maximum amount a user can raise on crowdfunding platforms from $1 million to $1.07 million and the amount an investor can give on the platform from $100,000 to $107,000 in a 12-month period, according to the SEC.

The regulating body also approved inflation adjustment of the income threshold for businesses qualifying as “emerging growth companies,” eligible for benefits under the Jumpstart Our Business Startups (JOBS) Act of 2012.

The SEC is required to make inflation adjustments to certain JOBS Act rules at least once every five years, according to the SEC.

“Regular updates to the JOBS Act, as prescribed by Congress, ensure that the entrepreneurs and investors who benefit from crowdfunding will continue to do so,” Michael Piwowar, acting SEC chair, said in a press release. “Under these amendments, the JOBS Act can continue to create jobs and investment opportunities for the general public.”

Also, the SEC has adopted amendments to Securities Act Rule 405 and Exchange Act Rule 12b-2 to include a definition for “emerging growth companies” that reflects an inflation-adjusted annual gross revenue threshold.

The commission approved the new rules March 31. They will become effective when they are published in the Federal Register.