Kristine Singer, a consultant from Miami, gave $75 through Indiegogo.com to a business raising cash to market the Scrubba, a small bag designed for travelers to wash clothes on the go.
"There are a lot of great products and a lot of people with great inventions," said Singer, who lives on a sailboat and expects to get two Scrubba bags in return for her donation. "To also receive profits back in the future if they were able to grow, that would be a win-win for everybody."
The legislation increases the likelihood that individuals will invest in startups and lose money because the companies are riskier, said Barbara Roper, director of investor protection at the Washington-based Consumer Federation of America.
"Crowdfunding is something I would say has precisely the same place in the average person's investment portfolio that lottery tickets do," Roper said. "If you have a little spare cash that you think it would be fun to gamble with that's fine, but don't consider it part of a well-thought-out investment strategy."
The bill prevents states from policing crowdfunding offerings until an alleged fraud has been committed, so people will need to do more research before they use the online sites, said Herstein, who's also an assistant director with Nebraska's department of banking and finance.
"The last few years have been pretty tough on entrepreneurs," Obama said at the signing of the law. "Because of this bill, startups and small business will now have access to a big, new pool of potential investors -- namely, the American people," he said. Websites used to pool funding will be subject to "rigorous oversight," the president said.
Singer said she wasn't worried about fraud when she contributed.
'Like EBay'
"It's kind of like EBay," she said. "If you can trust the site and it's as transparent as it can be, it's not really a concern."
Investors in shares of non-publicly traded stock are generally entitled to the same tax treatment that people use for publicly traded securities, according to the Internal Revenue Service. That means profits from sales usually are taxed at capital gains rates, currently a maximum of 15 percent for those held more than one year. There also are limitations around how much any losses that exceed gains may be deducted against other income such as wages.