Regulation crowdfunding is showing signs of gaining some traction a little more than a year after the Securities and Exchange Commission gave the concept a greenlight.

Startups and other entrepreneurs appear to be warming to the idea of offering equity to unaccredited investors in exchange for cash – a trend that’s playing out locally.

A total of 391 companies raised some $47 million nationwide through crowdfunding as of July 1, according to data from SEC filings compiled by West Hollywood-based StartEngine Crowdfunding Inc. Los Angeles County – with about 3.5 percent of the U.S. population – represented a good portion of the national haul. Thirty-four companies based here raised $3.8 million – about 8 percent of the total take (see data and graphics, right).

The figures only include companies raising less than $1.07 million, and not larger raises through a different equity crowdfunding mechanism known as Regulation A+.

The overall dollar figures aren’t eye-popping – regulation crowdfunding won’t displace the venture capital or private equity hierarchy anytime soon – but the market is expanding and offers unaccredited investors an asset class that wasn’t available before, according to StartEngine founder and Chief Executive Howard Marks.

“The big picture is that for the last 80 years the ordinary investor hasn’t had access to private equity investment options,” Marks said. “It’s an entirely new asset class for the average investor.”

Marks’ company connects such investors to companies looking to raise money via regulation crowdfunding. StartEngine offers a web platform – it takes 6 percent of any funds raised – where companies can post pitches to investors. StartEngine also offers consulting services – for an additional $4,000 upfront – to companies looking for help creating effective campaigns. Marks’ outfit has so far helped 21 companies raise close to $7 million, and he has aggressive plans for growth.

“We had 10 companies last year and will have 100 companies this year,” he said. “Next year, we will be in the multihundred and would love to get to 1,000.”

Right now, the majority of companies using regulation crowdfunding are enterprises that haven’t been able to gain traction through traditional venture capital channels or are so underdeveloped that they can’t hope to take that avenue, Marks said. That leaves crowdfunding as somewhat of a fallback strategy for many that would ultimately like to secure venture capital or private equity money.

He sees it developing into something more over a longer haul.

“We’re guiding companies toward the concept that they should keep coming back to the crowd for additional money,” he said. “There’s a path for companies to do ongoing raises from the crowd. Obviously, if a VC comes in, that’s great – they can raise a lot of money that way – but if not, the crowd can potentially offer more funding.”

There have been some hiccups with regulation crowdfunding in the past year. The SEC in May issued a notice about a certain type of equity offering called a simple agreement for future equity, or SAFE. The SEC warned that these types of agreements between companies and regulation crowdfunding investors are complex and that investors do not receive any equity in a company unless future benchmarks are met.

“Despite its name, a SAFE may not be ‘simple’ or ‘safe,’” the SEC wrote in its bulletin to investors.

Marks said StartEngine has mostly counseled companies to stay away from SAFE raises even though it gives them more initial control.