Small (under $1 billion) companies can raise money directly from small investors in a formalization of the “crowdfunding” approach, whereby a project’s principals post their plans on a Web site and ask for money, essentially opening up the initial public offering (IPO) market. The theory underlying the law is that a new set of accredited third-party marketplaces, rather than the overburdened Securities and Exchange Commission (which missed Bernie Madoff’s monster Ponzi scheme), will ensure that entrepreneurs tell the truth, and that investors know what they are buying.