The 'accredited investor' rules make it hard to accept traditional equity investments from small net-worth investors. My understanding is that ventures can take a small number of close-family/friends/founding-employee investments from non-accredited investors, but the added costs and risks of setting this up limit its use when there are other options.

Yet, there are attempts to hack-around the traditional overhead. Though I know very little about it, I'm intrigued by 'ProFounder', a funding mechanism that seems to use revenue-shares rather than equity to get around some of the regulatory barriers that otherwise prevent crowdfunding by small investors. See:

http://www.profounder.com

The founding team with kiva.org alumni (and recognizable advisors and investors) suggest this isn't just some dreamy, naive, or fly-by-night undertaking.