TechCrunch | by Josh Constine | October 23, 2013

Hundreds of days past the deadline, an SEC panel today unanimously voted to propose a rule allowing equity crowdfunding of startups by anyone, not just rich accredited investors. The rule will now go into a lengthy public comment period before an SEC vote on whether it will go into effect.

True crowdfunding is the third piece of the JOBS Act to be addressed by the SEC. It approved lighter reporting requirements for startups earlier this year, and just last month lifted the longstanding ban on general solicitation of fundraising by startups and investment funds.

After being proposed and unanimously voted for by the five SEC commissioners, the equity crowdfunding rule now heading to public comment does include a number of restrictions.

First, companies can only raise up to $1 million a year from the crowd. There are limits on the percentage of their income a person earning less than $200,000 a year can invest. For example, someone earning less than $100,000 a year can only invest $2,000, or 5% of their income. The current proposal doesn’t require companies to verify the income levels of its crowd investors. However, this is a topic the SEC wants to see the public discuss during the comment period.

According to Crowd Funding Forum, the amount an individual can invest will be based on either their net worth or income level bracket, whichever is higher. Deals will have to go through registered crowdfunding portals like startup CircleUp. Non U.S. crowdfunding portals can submit to an on site examination by the SEC if they want to register to manage equity crowdfunding. Companies will need to keep accurate lists of their investors, which may be aided by hiring a registered transfer agent.

If equity crowdfunding by unaccredited investors is eventually passed, it could unlock a huge well of funding for startups.

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