Around the same time, on April 5, 2012, President Obama signed into law the Jump- start Our Business Startups (JOBS) Act. In contrast to the already existing crowdfunding platforms that enable individuals to raise funds as donations or in return for rewards (sim- ilar to pre-sales of new products in some cases), a key provision of the JOBS Act legalizes crowdfunding for equity by relaxing various restrictions concerning the sale of securities. 1 However, the primary purpose of the Securities Act of 1933, which is the basis for most of the regulations in question, is to protect investors. Thus, relaxing these restrictions raises the concern that crowdfunding will expose investors to risk from fraud or incompetence