Equity crowdfunding is the name given to the process whereby people (the crowd) invest in a company in exchange for shares.
It is a new capital raising and investing method. Federal equity crowdfunding (Reg CF) enables startups and small businesses to raise up to 1 million capital/year from non-accredited and accredited investors, through funding portals. Non-accredited investors are considered all individuals with an income lower than $200 K/year.
Starting May, 16 2016 when the Regulation Crowdfunding became active, non-accredited investors can be shareholders.