Security regulations have evolved in a manner that stifles local investment. Similarly, the financial industry dominates the economy in a non-positive way (Cortese, 2011). Various laws passed by Congress such as The Securities Act of 1933, the ’34 Act, and 1982’s Regulation D. helped categories things in the investing world. Namely, if a person had a net worth of $1 million or more (or at least $200,000 of annual income) they would be in the top two percent of Americans and could invest in virtually anything they’d like (Cortese, 2011).  The remaining, which is virtually the majority of Americans, who don’t meet the previously set standard were allowed to buy publicly traded stocks, bonds, and mutual funds but in essence were restricted from a wide range of investment opportunities as they were deemed to risky (Cortese, 2011).

Although this categorization still stands today, the SEC has made exemptions in attempts to make it easier for small companies to raise money from the public. However, the numerous regulations in place still create some difficulties. As such,  companies should read up on the regulations and exemptions and ensure they are operating within compliance at all times. Having someone well versed in the ins and outs of occurrences in the investment word or a legal representative would be beneficial for small businesses.  


Cortese, A. (2011). Locavesting: The revolution in local investing and how to profit from it. Hoboken, NJ: J. Wiley & Sons.

Join the Conversation


  1. Shayna, Reporting correctly is extremely important in order to reduce liability. It is everyday people that are creating and operating small businesses. It is important that capital remain available in order for new innovative ideas to take hold as well as for founders to grow their businesses.
    Best regards,
    Mike Weimar


  2. I had never really put much thought into the complexities of regulation on the investment world before. This chapter’s reading really enlightened me as to how much goes on in those situations. It is a little mind-boggling still. I like the idea of these smaller ventures working smarter to steer away from the apparent traps of the larger investment firms and focusing instead on community based offering. New opportunities abound, people (and companies) just need to be willing to look in untapped directions to make the most of what is available to them. It is nice to know that the traditional means are not the only course of action, especially when those older areas don’t fit the needs of your direction.


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