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(By Michael Erman) – U.S. securities regulators approved new crowdfunding rules on Friday, allowing start-up companies to raise money from mom-and-pop investors over the internet.

Private companies were previously allowed to solicit only accredited investors – those with a net worth of at least $1 million, excluding the value of their homes, or annual income of more than $200,000.

The Securities and Exchange Commission voted 3 to 1 to approve the measure, the last piece of the Jumpstart Our Business Startups (JOBS) Act, a 2012 law enacted with wide bipartisan support that relaxes federal regulations to help spur small business growth.

Crowdfunding was delayed at the SEC by leadership changes and difficulties in crafting workable rules. Since the crowdfunding rules were originally proposed in October 2013, the SEC has tightened limitations on how much investors can invest in these start-up companies.

Investors with annual income or net worth of less than $100,000 would be limited to contribute only $2,000 or 5 percent of their net worth or income, whichever is greater.

Those with a higher net worth or income would be able to invest 10 percent of the lesser of their annual income or net worth in these transactions, with a cap of $100,000 over a 12-month period.

The SEC also made changes to the audit provisions of the crowdfunding rule, allowing some companies raising money through crowdfunding for the first time to provide reviewed rather than audited financial statements.

Still, Commissioner Michael Piwowar, who voted against the measure, argued that the new regulations would be too onerous for many small businesses.

“I fear that many traps for the unwary are hidden in the regulations, creating potential nightmares for small business owners that fail to place regulatory compliance at the top of their business plans. Such burdens will spook many small businesses from pursuing crowdfunding as a viable path to raising capital,” he said.

The commission said that its staff would continue to study whether crowdfunding investor protections are robust enough as well as the impact of the new regulations on capital formation. The staff will issue a report within three years of the rules becoming effective.

The SEC also passed amendments to two rules that govern intrastate and regional securities offerings. (Reporting by Michael Erman; editing by Grant McCool)

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