ON NOVEMBER 3rd, surprisingly, a bill was passed by the House of Representatives with strong bipartisan support. The Entrepreneur Access to Capital Act aims to make it easier for small businesses to raise money through “crowdfunding”. For the first time ordinary investors would be allowed to put up to $10,000 in small businesses that are not registered with the Securities and Exchange Commission, enabling Joe Schmo to win big if the company becomes the next Google.

Some non-profits and small businesses already raise money through crowdfunding. Websites allow entrepreneurs to post information about their business plan and to offer perks, such as T-shirts, in return for “donations”; but current securities laws allow only “accredited investors”, rich folk supposedly aware of risks of the venture, to buy a financial stake in the business. In spite of this crowdfunding has thrived. Slava Rubin of IndieGoGo, one of the first crowdfunding websites to launch, three years ago, reckons around 250 competitors have sprung up.

Brian Lamb of Satarii, which sells a device that helps people film themselves with their iPods, raised around $25,000 through IndieGoGo. Their successful online campaign helped attract a further $650,000 from sophisticated “angel” investors. But Mr Lamb thinks they would have been able to raise even more if average investors had been allowed a stake in the firm.

Start-ups are especially needy now, since many banks are loth to lend even to well-established companies. Optimists, including the White House, which supports the bill, say that if small businesses get better access to funding they can help create jobs. Start-ups in America already add around 3m jobs a year, according to the Kauffman Foundation, a think-tank.

But making it easier for start-ups to tap ordinary folk for money online could encourage fraudsters, too. “I am terrified,” says Heath Abshure, the Arkansas securities commissioner, who warns about “the wild, wild West”. Jack Herstein, president of the North American Securities Administrators Association, says the only jobs created will be “more jobs for securities investigators”. The current bill does not require start-ups to give detailed information about their business plan, and since stakes in businesses are illiquid, investors will not be able easily to get their cash back.

But conventional investing is not exactly safe either. It is quite legal, as one crowd-funding supporter says, “to go to Vegas and lose all your money”. Perhaps this isn't the best mantra, however, for those who want to ease America's securities laws.