It’s tantalizing to imagine getting shares in a start-up that might go on to become the next Google. That’s part of what draws us to sites like Kickstarter.com where everyday people can pledge cash investments in start-up projects in exchange for recognition and swag.

Still, it’d be nice to get more than swag for laying hard-earned cash on the line. That’s the idea behind crowdfunding – fundraising for private companies in exchange for a stake in the company. Unfortunately, wide-scale crowdfunding is yet to materialize due to complex regulatory issues set by the SEC and other securities agencies.

At the moment, investing in private businesses is limited to what the SEC calls “accredited investors.” That includes banks, investment companies and wealthy investors. The idea is that since private companies don’t have to publicly disclose their earnings information, retail investors could get duped into dumping cash into a bottomless pit. By setting rules for accredited investors, the SEC limits investing in private companies to savvier investors and institutions since they should be more familiar with the unique risks that start-ups bring.

Whether or not that’s true, it seems like the onus should be on the buyer, not the government to tell us what we can and can’t investment in. Passage of the JOBS Act has crowdfunding fans hopeful things are about to change, too.

And there’s one company in particular that’s leading the charge: CircleUp.com. CircleUp vets consumer and retail start-ups that are looking to raise up to $1 million. If that start-up meets CircleUp’s criteria and has $1 to $5 million a year in revenue, CircleUp opens up investment opportunities in that company.

Right now, CircleUp is limited to accredited investors, but “the site may open to unaccredited investors,” per reports from AllThingsDigital. Expect a big surge in interest if that happens.

CircleUp’s model differs from that of competitors like SharesPost and SecondMarket in that it limits offerings to companies that are actually generating revenue. Companies listed on SharesPost and SecondMarket might not have made a dime in the past, and perhaps they won’t ever generate cash in the future.

“Private investments in small businesses are the next step in the evolution that began fifteen years ago with simple consumer transactions on eBay, and have continued with very personal matchmaking for housing and dating on sites like Craigslist and financial transactions through investment brokerage firms and online banking,” CircleUp said in a recent statement.

Gartner Research estimates that crowdfunding will be a $6.2 billion market by 2013. If things go well, expect CircleUp to capture a fair chunk of that pie.

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