Mar 5, 2013 · 4 minutes

One of the most-talked about portions of the JOBS Act, which passed Congress thanks to the tireless efforts of AngelList's Naval Ravikant and other entrepreneurs, is the provision allowing for online equity crowdfunding. Think Kickstarter, only instead of getting rewards like swag or thank-you notes in return for donations, donors receive real equity in the company. (For more, watch our video explainer).

But that doesn't mean anyone off the street can invest. The SEC has been slow to iron out the details, but as of right now equity crowdfunding is still only open to accredited investors, meaning individuals or couples with net worths over $1 million. According to census data, in 2008 there were up to 7.2 million accredited investors in the United States; a decent-sized chunk, but a consumer-base the equity-crowdfunders would love to see grow. Meanwhile, the SEC continues to miss deadline after deadline, making things complicated for eager startups hoping to cash in on the new law.

It could be 2014 before the SEC decides exactly who can and can't participate. But Alejandro Cremades, CEO/Co-founder of the New York-based crowdfunding site RockThePost, is ready to move past the rewards-based approach his company previously took, albeit gently. Starting today, RockThePost will more closely resemble crowdfunding portals like CircleUp and Fundable, as it launches a new online investment platform that gives equity in return for investment, replacing the old "T-Shirt-and-thank-you-note" model. To help with all the gritty details like application review and deal terms, RockThePost will partner with former E*Trade CFO Robert Simmons and the financial services firm Bendigo Securities.

The platform is pretty straightforward: Investors (only accredited ones for now of course) can contribute as little as $1000 and entrepreneurs can raise up to $5 million, though Cremades expects the average deal to be around $500,000. RockThePost makes money by charging startups a percentage of what they raise, and there's no fee for investors to use the platform.

To be considered for inclusion, an entrepreneur must passes through two filters: First, RockThePost's team takes a holistic approach to determining the potential success of a business. "We look at what kind of story you have, what kind of following you have, and how unique you are," says Cremades. "We're not trying to compete with VCs," he adds, emphasizing that the companies that are the best-suited to RockThePost probably won't have tenfold growth outlooks. Instead, Cremades is looking for breakthrough business concepts that don't require huge built-in markets to post modest yet substantial return rates.

If a company passes the initial eye-test, that's when Bendigo's team takes over, conducting due diligence and background checks to make sure RockThePost's users, many of whom Cremades hopes will be first-time investors, don't get hosed. "One of the bigger problems we're solving is trust."

RockThePost's shift from rewards to equity is somewhat of a mixed bag -- on one hand, the move makes the platform much more attractive for everyone involved. As one commenter noted when Erin Griffith covered the launch of RockThePost's rewards platform last June, free T-shirts don't exactly put investors into fits of excitement.  On the other hand, the rewards model, while familiar to anyone who's funded creative projects on Kickstarter and Indiegogo, was actually somewhat novel in the startup capital funding space. It helped set RockThePost apart in a crowded field.

So why should an entrepreneur choose RockThePost over one of the many other crowdfunding platforms? To sweeten the deal, RockThePost has also partnered with the lawfirm Farkas Neurman to offer reduced legal fees for participating startups. "Legal fees for an early stage company can be very expensive -- $15,000 to $20,000 to close a seed round. We're able to provide reduce legal fees to fixed fee of 3,000 or less."

And what's the draw for investors? Whoever wins over the lion's share of the equity crowdfunding market will likely do so because of trust. If the SEC allows non-accredited investors to participate in equity crowdfunding the biggest worry is that ordinary people will lose everything by investing in shady deals. But while nothing's a sure bet, Cremades takes the vetting process very seriously, focusing on quality over quantity. Over the last two weeks, he says, only 3 startups were accepted out of 300 applications. (Though it's not as if RockThePost has a monopoly on selectivity. CircleUp is also known to be very choosy.)

Finally, it bears noting that RockThePost benefits from having a passionate founder in Cremades. When I talked to him last May, he made it clear this isn't about investors or founders making a quick buck or riding a short-lived wave. "The community really needs small businesses,” he told me. “Small businesses generated (over) 60% of new jobs that were created over the past 17 years. We think crowdfunding can lift a little bit the conditions small businesses and entrepeneurs are facing. We hope to really be able to make a difference in people’s lives.” Here's to saving the US economy.

[Image courtesy Eric in DUB]