Small companies in the United States can now raise funds from ordinary retail investors through online portals, as new equity crowdfunding rules took effect on Monday.

U.S. investors can now buy securities in early-stage companies via online crowdfunding. While crowdfunding represents a new way for small firms to raise funding, and a novel investment opportunity for ordinary retail investors, regulators remain concerned about the potential for investors to suffer losses, either through the typical high-failure rate of small businesses, or misconduct, such as fraud and misrepresentation.

An investor alert issued by he U.S. Financial Industry Regulatory Authority (FINRA) on Monday aims to explain the new requirements of the new U.S. crowdfunding regime, and includes tips for investors to help them decide whether to participate in crowd funded offerings or not.

“Crowdfunding generates a lot of buzz, and the possibility of getting in on the ground floor of the next great startup can be very tempting. But as with any new type of opportunity, investors should step back and first ask the right questions,” says Gerri Walsh, senior VP of investor education at FINRA, in a statement. “Investing in unregistered, emerging securities carries significant risk, and investors have to beware the attraction of the shiny, new object and make an informed, rational investment decision.”

FINRA oversees the registration of crowdfunding portals, and ensures that both portals and brokers that offer securities via crowdfunding are complying with the federal securities laws and FINRA rules in this area.

Additionally, the North American Securities Administrators Association (NASAA) released a proposed model rule and standardized form for reporting federal crowdfunding offerings, which it says aims to provide guidance to issuers that are considering crowdfunding to finance their businesses.

“Today, as the SEC’s Regulation CF takes effect, the United States enters a new era in crowdfunding. I believe this milestone gives state regulators another opportunity to increase our collaboration with our federal partners,” says Judith Shaw, president of NASAA and Maine’s Securities Administrator.

“Ultimately, NASAA believes that the adoption of a model rule and uniform notice filing form by those states that wish to require notice filings will be a benefit to both issuers and regulators,” Shaw adds, noting that 32 states and the District of Columbia have adopted intrastate crowdfunding models.

In Canada, several provinces (including Quebec and British Columbia) adopted new start-up crowdfunding exemptions in May 2015; and, earlier this year, a separate exemption took effect in a handful of provinces, including Ontario and Quebec.