New Crowdfunding Act to help small businesses raise money

NORTHAMPTON, Mass. (WWLP) - Some big changes are on the way for small business owners. On Thursday, President Obama signed the Crowdfund Act into law, which could make it easier for small businesses to raise money.

It can often be very difficult for entrepreneurs and small business owners to raise funds. Up until today, those small business owners could only receive investments from wealthy people.

Now this "Crowdfunding" legislation lets people get investments from anyone, friends and family regardless of wealth.

Sen. Scott Brown (R-Massachusetts) proposed this last month in hopes of boosting job growth here and across the country. Small business owners in the area, and those that assist those entrepreneurs say this is change is huge.

"I think it's very good news,” said Attorney Scott Foster of Bulkley Richardson . “It's really a game changer for funding for these startup companies who often struggle with that initial round of funding of $100 or 200 thousand."

Nathiel Davis, founder of playgivewin.com explained for 22News what the legislation means for him.

"No longer will I have to go to Boston, to New York or a main hub to meet with a finite group of wealthy individuals. Now your average individual has the opportunity to become an angel investor,” Davis said.

Small business is considered the driver of the American economy.

This change will require those who want to invest in these small start-up businesses to be aware of the risks associated with that investment.