U.S. Rep. Patrick McHenry of North Carolina met with two dozen entrepreneurs and investors Wednesday at uptown startup hub Packard Place to discuss the impact of new crowdfunding legislation he helped write.
The legislation -- part of last year's bipartisan Jumpstart Our Business Startups (JOBS) Act, which was designed to help businesses grow and hire -- will make it easier for startups and small businesses to gather small amounts of money from non-accredited investors in exchange for equity in the company.
Previously, businesses could only take on investors with a certain net worth, income or personal relationship.
"Small businesses are starved for capital," said McHenry, a Republican who represents the state's 10th district stretching from Gaston County to Asheville. "We have to lighten the load so funding can flow."
Critics worry the new rules could cause small, inexperienced investors to lose money. The Securities and Exchange Commission recently released nearly 600 pages of rules dictating the new provisions. The rules are open for public comment for the next 90 days.