Wednesday, July 23, 2014

NC JOBS Act Update (Now Tracking as H1224 Part V)

Today the full NC Senate passed the second reading of H1224, a bill which combines the NC JOBS Act with other economic measures.

Yesterday the Senate Finance Committee merged H680 as Part V of House Bill H1224. The Committee Substitute (PCS) combines and enacts The Jump-Start Our Business Startups Act (The NC JOBS Act, H680 as previously passed by the House) and four other entirely separate economic development bills. The PCS combines all bills into one labeled as H1224 Local Sales Tax Options/Econ. Devpt. Changes Parts I, II, III, IV, and V. Part V Crowd Funding with the Invest NC Exemption is the same as the previous version of H680 passed by the NC House last year.

This is a change in process from the previous attempts to merge H680 with Senate bill S734, and to merge H680 with Senate bill S522.

The bill has been approved by the Senate Finance committee and as a second reading on the full Senate floor. The bill will be brought to a final Senate floor vote and then back to the House for approval.

We will post further updates on the blog. Information about the changes on the ncleg.net website will be updated soon. Press coverage can be viewed on  WRALTechwire.


Wednesday, July 16, 2014

NC JOBS Act Update (Now Tracking as H680 Part 1 and Part 2)

Today the NC Senate Commerce Committee passed with a positive recommendation by unanimous voice vote the latest version of H680. The Proposed Committee Substitute (PCS) combines and enacts The Jump-Start Our Business Startups Act (The NC JOBS Act, H680 as previously passed by the House) and an entirely separate economic development bill called The New Markets Jobs Act of 2014 (as defined by Senate Bill S522). The PCS combines both bills into one labeled as H680 Part 1 and Part 2.

This is a change in process from the previous attempt to merge H680 into Senate bill S734. This represents a major step forward in getting the NC JOBS Act passed during this session.

The bill has been referred to the Senate Finance committee to approve the financial measures of the combined bills. If approved, it will go to the full Senate for a floor vote, and then back to the House for approval.

We will post further updates on the blog. Information about the changes on the ncleg.net website will be updated soon. Press coverage can be viewed on ExitEvent and WRALTechwire.




Wednesday, June 25, 2014

NC JOBS Act Update

As of today, we are still waiting for action from the North Carolina Senate on the NC JOBS Act.

Two important updates:

Update 1:

There has been a significant grass roots effort over the last two weeks to encourage our Senators to pass this bill. The start-up and small business community has been emailing and calling key Senators, which is very helpful. Over the weekend, the NC JOBS Act team put together a Community Statement of Support, and got an excellent response. Many thanks to all of you that called, emailed, or signed the letter. 


The statement has been forwarded to the Senate along with this introduction:

Dear Senators:

Attached is the Community Statement of Support for the NC JOBS Act (H680) that our team worked on this weekend. We urge you to pass H680 this session.

This legislation enables a new type of financing in our state known as intrastate investment crowdfunding. It has been endorsed by many of the top start-up and business leaders in the Triangle community. The attached list includes endorsements from CEOs, Founders, Managing Directors, Partners, and Investors at our leading Start-up Accelerators, individual Angels and Funds, Venture Capital Funds, a leading CPA firm, the North Carolina Technology Association, the North Carolina Biotechnology Center, SAS Institute, UNC Chapel Hill Technology Development Center, Triangle business attorneys, and many of our local technology start-up CEOs. This is a strong showing of support that we received over the last 72 hours. These start-up community leaders are representative of the over 12,000 start-up and small business community members that have visited our NC JOBS Act blog to learn more, and are excited about the possibilities.

Please forward this letter of support to your colleagues in the NC Senate and House. Please help us make this new form of financing for start-ups and small businesses a reality so we can grow the economy and create more jobs in North Carolina. Pass H680 now.

Thank you.    

Best regards,

Mark Easley Sr.
The NC JOBS Act Team
www.jobsnc.blogspot.com

Update 2:

Lieutenant Governor Dan Forest has joined the community of supporters of the NC JOBS Act. We received this letter of support from his office.

Thank you for your e-mail on H680, The Jump-Start Our Business Start-Ups (JOBS) Act. Lieutenant Governor Dan Forest believes that this bill is an important step towards growing North Carolina businesses by allowing start-up companies and companies that wish to expand the ability to quickly raise capital from smaller investments, often called crowd-sourcing or crowd-funding. As a result, businesses will be able to establish themselves in their market on an expedited basis and employ more North Carolinians sooner--all while having many citizens invested in the company's success.  The Lieutenant Governor supports passage of this bill as a well-thought out mechanism to ease the burden on North Carolina's start-ups.

Rebekah Bradley
Office of the Lieutenant Governor
310 N Blount Street
Raleigh, NC 27601





Friday, June 6, 2014

Investment Crowdfunding Can Become a Reality in North Carolina This Year

The North Carolina JOBS Act enables a new way of funding startups and small business in our state known as investment crowdfunding. The FAQs and other posts on www.jobsnc.blogspot.com provide details and analysis of what the bill does and how it will work. The legislation (H680) passed the NC House by an almost unheard of bipartisan vote of 103 to 1 last June, and is now pending in the NC Senate for the short session beginning May 14th. So if everything goes as expected, 2014 will be the year that intrastate investment crowdfunding will become a reality in North Carolina.

Over the last year here in the U.S., there have been a number of important developments in the investment crowdfunding exemption story. Many states are following in the footsteps of Kansas and Georgia, who were the first to implement in-state investment crowdfunding exemptions by regulation, and North Carolina, where we were the first to introduce an exemption by legislation.

As of today seven states - Kansas, Georgia, Michigan, Wisconsin, WashingtonIndiana, and Alabama - have intrastate crowdfunding exemptions in place, four states - North Carolina, Florida, Texas and California - have legislation pending, and five more including Idaho, Colorado, Maine, Maryland and New Jersey are in various stages of considering the idea. Here is a comparison of several of these intrastate crowdfunding exemptions. 

Many more states are expected to join the intrastate investment crowdfunding movement because it grows the economy from the ground up and creates jobs locally.  And here is a statement from North Carolina Congressman Patrick McHenry, the original creator and sponsor of the the Federal JOBS Act, on why he supports state based solutions like NC JOBS

In the startup community, which is so important for North Carolina in both the technology and life sciences markets, a report in Entrepreneur Magazine says that crowdfunding is the fastest growing source of funding for startups. In addition, accredited investor crowdfunding sites like AngelList and FundersClub have proven how effective they can be in providing funding for high growth startups. As an example, just one of the investment crowdfunding sites called EquityNet has over 130 investment crowdfunding projects listed just in the biotech-pharmaceutical-healthcare category.

So what else has changed since last year?

Crowdfunding in general, and investment crowdfunding in particular have been growing very rapidly in the US and around the world. The biggest donation and rewards based site Kickstarter just announced that they surpassed $1B in pledges to crowdfunding campaigns hosted on their site.  Entrepreneur Magazine calls the growth of crowdfunding ‘epic’ and says the crowdfunding economy has tripled in 3 years and was over $5.1B in 2013. They also expect crowdfunding to provide a $65B boost to the world wide economy in 2014.

In the United Kingdom, where investment crowdfunding has been legal for over 3 years, the investment site CrowdCube has announced their stats on their 3rd birthday in 2014:
         
“The platform has raised £19.9 million (around $33 million) for 103 businesses, which Crowdcube anticipates will add 1900 jobs over the next three years. Darren Westlake, the company’s cofounder and CEO also mentioned that the company grew by 562 percent on the year before, and it sees over 100 applications per month. The company has 60,000 registered members.”

And that is just one of the many investment crowdfunding platforms operating in the UK, other parts of Europe, and in Australia.

Meanwhile, several types of investment crowdfunding have taken off like rockets in 2013. One is investment crowdfunding in startups for accredited investors on sites like AngelList, another one is called Peer-to-Peer (P2P) lending, where people get personal loans from the crowd, and a third is real estate crowdfunding, where local real estate development projects are funded by the community crowd.

Many more market segments are just beginning to use investment crowdfunding as a financing method. And venture capitalists are making major investments in a wide variety of crowdfunding platforms and services around the nation, because they see this as a major growth industry in the financial sector coming down the road.  A report by nowstreetwire has more details on these trends.

So what does all this mean to North Carolina?

It means we can benefit from these trends by helping our small businesses and startups to participate. We can make it much easier for them to find funding. And that funding will help them grow and create jobs. The NC JOBS Act investment crowdfunding exemption will be an important part of making it happen.

Support the North Carolina JOBS Act:

If you have not yet done so, now is the time to contact your state Senators with an email of your support for  H680, the NC JOBS Act. It is very easy to do using the links we give below.
If you have any questions or comments, please email the JOBS NC Crowdfunding Team at jobsnc@nc.rr.com or contact Representative Murry’s office at murryla@ncleg.net.


Wednesday, June 4, 2014

We Need Your Help with H680, the North Carolina JOBS Act, which Enables Investment Crowdfunding in North Carolina

Dear friends and supporters of the North Carolina small business and startup communities:

We are in the final stages of making investment crowdfunding a reality here in North Carolina with the passage of H680, the North Carolina JOBS Act. It has already passed the NC House last session by a vote of 103 to 1. We need your help to push it over the finish line in the NC Senate.

Please call and email your expressions of support to the Senate Leadership and your own NC Senator. Use this tool to find and contact your own North Carolina State Legislators and express your support. Senator Berger is Senate President Pro Tem, Senator Tarte and Senator Barringer are working to get the bill passed in the Senate, Senators Gunn and Meredith are the co-chairs of the Commerce committee, and Senators Rabon and Rucho are the co-chairs of the Finance committee. Senator Apodaka is Chairman of the Rules Committee. Please ask them to move H680 forward. Senators Pate, Brown, and Tillman are part of the Senate leadership, and Lt Governor Forest is also Senate President. Representative Murry is Chairman of the House Commerce Committee and the Chief Sponsor and creator of H680. The bill needs action by the Senate Commerce and Finance Committees, and a floor vote in the Senate before the end of the short session, which began on May 14th, 2014 and is currently in session. There are many competing priorites in the session, so we need to keep the NC JOBS Act near the top.

Representative Murry
Tom.Murry@ncleg.net
Office: 919-733-5602

Senator Berger
Phil.Berger@ncleg.net
Office: 919-733-5708

Senator Barringer
Tamara.Berringer@ncleg.net
Office: 919-733-5653

Senator Tarte
Jeff.Tarte@ncleg.net
Office: 919-715-3050

Senator Gunn
Rick.Gunn@ncleg.net
Office: 919-301-1446

Senator Meredith
Wesley.Meredith@ncleg.net
Office : 919-733-5776

Senator Rabon
Bill.Rabon@ncleg.net
Office: 919-733-5963

Senator Rucho
Bob.Rucho@ncleg.net
Office: 919-733-5655

Senator Pate
Louis.Pate@ncleg.net
Office: 919-733-5621

Senator Apodaca
Tom.Apodaca@ncleg.net
Office: 919-733-5745

Senator Brown
Harry.Brown@ncleg.net
Office: 919-715-3034

Senator Tillman
Jerry.Tillman@ncleg.net
Office: 919-733-5870

Lieutenant Governor Dan Forest
hal.weatherman@nc.gov
Office: 919-733-7350

Thanks for your help, and please forward this request to your contacts in the startup and small business communities.

Best regards,

NC JOBS Act of 2014 Team


Here is a suggestion for an email or phone conversation. All the Senators have legislative assistants who will answer your call during office hours, and pass on your request to the Senator. If the timing is right, many of the Senators will take your call as well. Please be courteous and respectful of their time when calling.

“I am (  ) with (  ). I am contacting the Senator with regards to H680, the NC JOBS Act. This bill, which creates a new way to fund startups and small business using investment crowdfunding, is a great opportunity to create jobs and improve the economy in North Carolina. It passed the House by a wide bipartisan vote of 103 to 1, and has support from the startup and small business communities of North Carolina. This bill needs action from the Senate during the short session and I urge you to pass this bill. Thanks for your support of NC JOBS and the small business community.”


Support the North Carolina JOBS Act:

If you have not yet done so, now is the time to contact your state Senators with an email of your support for  H680, the NC JOBS Act. It is very easy to do using the links we give below.
If you have any questions or comments, please email the JOBS NC Crowdfunding Team at jobsnc@nc.rr.com or contact Representative Murry’s office at murryla@ncleg.net.




Wednesday, May 28, 2014

The NC JOBS Act Works for Rural Business Too

Crowdfunding is rooted in community. Before the modern mega-banking industry began to take shape, communities would come together to finance the needs of community members. Small rural banks knew their borrowers and their depositors. This was truly "relationship banking." Today however, relationship banking is all but dead. To most banks, the customers are merely a collection of numbers: credit scores, account balances, assets, and income. This way of doing business means that customers in small or rural communities are usually under-served. 
The 2008 credit crisis made matters even worse for rural communities. Many local banks failed, and national banking conglomerates curtailed their lending activities in these communities. Things haven't gotten better. Small business borrowers in particular have few alternatives when it comes to accessing capital. Rural communities may not yield the next Twitter or Facebook, but they are places where people live and work. The rural small business owner deserves the same opportunities to grow their business as any other company. Here in North Carolina, one way to serve rural citizens and aid rural economies is with grant programs like the Golden Leaf Foundation. And now, with the NC JOBS Act, North Carolina will have another tool to help these communities.

The NC JOBS Act brings control of financing back to the community. Through crowdfunding, as defined in the NC JOBS Act, rural small businesses will be able to solicit their customers and community members when it comes to raising money, and not be limited to just the banks and grant programs. Now, the people who are best equipped to assess the prospects of a rural small business, the very same people who live in those communities, can contribute to the development and growth of their local economies by investing in local businesses. We've seen this play out on a larger scale, such as the success of CrowdCube in the U.K. in helping many small businesses, so why should we wait any longer for our rural and local small businesses to benefit from the same fundraising tools?
The NC JOBS Act is a common sense solution to an important problem: giving small business owners the capital they need to grow and hire. At the same time, it gives many individuals the opportunity to invest locally. Let's make 2014 the year we implement this important new fundraising framework.

Support the North Carolina JOBS Act:

If you have not yet done so, now is the time to contact your state Senators with an email of your support for H680, the NC JOBS Act. It is very easy to do using the links we give below.


If you have any questions or comments, please email the JOBS NC Crowdfunding Team at jobsnc@nc.rr.com or contact Representative Murry’s office at murryla@ncleg.net.



Wednesday, May 21, 2014

Yente in the Middle: SEC Ensures Matchmakers will Play a Key Role in Crowdfunding And Other JOBS Act Exemptions

Benji's Blog by Benji Jones

“Matchmaker, Matchmaker,
Make me a match,
Find me a find,
catch me a catch”

Benji Jones
Ever since the SEC issued its compliance and disclosure interpretations (or C&DIs) on conducting intrastate crowdfunding offerings under Rule 147,  I just can’t seem to get that song out of my head . . . do you know it?   It’s from the Broadway classic, Fiddler on the Roof. Set in the early 1900s in rural Russia, Fiddler tells the story of Tevye (TEV-yah), the father of five daughters, and his struggle to maintain his family and Jewish religious traditions in the face of outside (modern?) influences encroaching upon their lives. (Thanks to the Wiki page for this quick synopsis.)  I know the show and the song well.  I played Chava (HA-vah), the “book smart” daughter, several years back.  (Type-casting, you say???)

You see, Tevye expects his daughters to marry as he and the local matchmaker, Yente (YEN-teh), dictate.  This doesn’t sit well with Tevye’s three oldest strong-willed, independent young daughters, Tzeitel, Hodel, and Chava.  They think they should be able to find their own husband and marry for love – even if they don’t follow with tradition (gasp!).  They don’t need, and certainly don’t want that old busy body, Yente, getting into their business and telling them who and in which order they must marry!  And, just think how much money they could save by not having to pay the matchmaker’s fees!


Gosh this sounds familiar.  It seems the SEC is taking a page from Tevye’s script – insisting that companies use a matchmaker to find investors.  Think about it: 

  •          The recent CD&Is on Rule 147 tell us that companies can use third-party internet portals to conduct intrastate crowdfunding offerings, but that it’s going to be really tough for them to “go it alone” and use their own existing internet or social media presence to promote offerings.
     
  •         The proposed Securities Act Section 4(a)(6) “crowdfunding” rules under Title III of the JOBS Act require companies to use registered funding portals to conduct offerings.
     
  •         Procedures under new Rule 506(c) favor the use of third parties (registered broker-dealers, CPAs, attorneys, etc.) for verification of accredited investor status.


All of these rules and regulations are making it harder for companies to “go it alone” – to find investors without having Yente in the middle (or having to pay Yente for her services).  The one bright spot may be moving forward under Regulation A+ under Title IV of the JOBS Act, but if NASAA succeeds with its lawsuit, companies may have several Orwellian “Big Brothers” to deal with as well.

Don’t get me wrong, matchmakers can serve a valuable purpose (in the love world and in the investments world).  A good matchmaker lives or dies on her reputation.  She learns everything about her clients and takes on the responsibility to make the best possible match for a family like Tevye’s -- or her livelihood suffers.  But is that really what is going to happen here?  Yes, there will likely be some form of recordkeeping and diligence obligations imposed on crowdfunding intermediaries, but will their services really add value?  Or will it be more like eHarmony or Match.com, where they present a list of companies that need capital and not much more, requiring investors to cull out the “cute ones” and take their chances on coffee or a “get to know you” lunch?   Only time will tell.

I get the challenge for the SEC.  Just like in Fiddler, the SEC is struggling to maintain the long-standing traditions that provide important investor protections in light of the modernizing world.  I’m just not sure its position limiting the ability to go it alone under Rule 147 really hits the mark. 

Irrespective of how it all plays out, I can’t help but chuckle as I imagine the SEC Commissioners, arms raised, fingers snapping, stomping around in full Tevye-style belting out:


If you have questions or comments, feel free to reach me by email at: benjisblog@smithlaw.com.

Benji Jones is a Partner at Smith Anderson, focusing on corporate and securities work (particularly private offerings). She also teaches at Campbell Law and lives with her family here in Raleigh.

Monday, May 5, 2014

Intrastate “Crowdfunding” – Thawing Frozen Capital Markets?

Benji's Blog by Benji Jones

The Deep Freeze.  This winter has been vicious.  Never-ending snow and icy roads leading to school cancellations, missed work and botched conference calls. Up until very recently we saw the claws of Old Man Winter scraping to hold out just a few more days against the sunny breezes and bright skies of spring.  This is unheard of in Raleigh, NC.  It’s been a frustrating winter, to say the least.

Benji Jones
For years entrepreneurs have faced similar frustrations in the quest to raise capital.  They claim well-established rules prohibiting the use of “general solicitation” and “general advertising” freeze them out of much of the market.  People are clamoring for the chance to use the web and social media outlets to not only promote their companies and ideas, but to raise the money they need to make those ideas come to life.  Initial excitement surrounding the “crowdfunding” provisions of Title III of the JOBS Act has waned.  It’s taking too long to get the rules from the SEC (it’s been two years!) and, weighing in at 500+  pages, describing them as “complicated” is an understatement.    

Roads are still icy and school is cancelled (again) -- the deep freeze seems endless.

Thawing Isolated to Local Areas. So, like winter bunnies, folks have gotten “creative.”  Over the past year or so, companies have begun using the (relatively unused) “intrastate” offering exemption under Section 3(a)(11) of the Securities Act of 1933 (and the related Rule 147 “safe harbor”) to “crowdfund” from residents in a particular state. The number of states that have adopted (including Kansas, Georgia, Washington) or are considering adopting (North Carolina, Florida and Texas) statutes and regulations permitting “intrastate crowdfunding” is snowballing.  Raising capital locally through the internet and social media seems to be a real possibility.

As with all novel solutions to complex problems, there are some nagging interpretive questions – spots of “black ice” to watch out for along this road.  For instance, Rule 147 stipulates that an offering may not be offered or sold to non-residents of the state in which the issuer resides and is doing business.   This begs the question of whether using the “world-wide” web to promote investments could ever really be viewed to be so isolated in nature.  Even if I’m only going to let people in Georgia invest, have I blown my exemption under Rule 147 if my tweet also reaches folks in North Carolina and Virginia (not to mention England or Brazil)? 

Roads are Clearing, But Watch Out for Potholes.  A few weeks ago, the SEC issued three compliance and disclosure interpretations (or C&DIs) which have the effect of clearing the road for using the internet and social media for intrastate crowdfunding.  But has one hazard been replaced with another? 

You see, the SEC said that companies can use a third-party internet portal to promote an intrastate offering if the portal implements specific measures to ensure that offers of securities are made only to persons resident in the relevant state or territory.  These measures include the use of disclaimers and legends to notify potential investors of the restrictions and actually limiting access to information about specific investment opportunities to persons who confirm they are residents of the relevant state.  But, the SEC also cautioned that an issuer’s use of its own existing website or social media presence to offer securities would likely involve offers to residents outside the state, making the offering inconsistent with Rule 147. 

So, based on this, it seems companies can hire someone else to help them crowdfund on the intrastate level but might not be able to do it themselves.  The SEC tells us that whether a company can “go it alone” under Rule 147 will be a “facts and circumstance” test.  That’s a fairly sizable pothole to watch out for.  As is the case with crowdfunding under the JOBS Act, it seems everyone needs a matchmaker . . .

More on that in my next post – in the meantime, if you have questions or comments, feel free to reach me by email at: benjisblog@smithlaw.com.

Benji Jones is a Partner at Smith Anderson, focusing on corporate and securities work (particularly private offerings). She also teaches at Campbell Law and lives with her family here in Raleigh.

Sunday, April 6, 2014

Why I Support North Carolina's Proposed Crowdfunding Law, the NC JOBS Act by Joe Wallin

In the post below, the highly respected crowdfunding legal expert Joe Wallin of Seattle explains why intrastate crowdfunding exemptions like the NC JOBS Act are needed and have several crucial advantages over the Federal JOBS Act. Joe recently led the effort to get a similar intrastate crowdfunding exemption signed into law in Washington State.


“Why I Support North Carolina’s Proposed Crowdfunding Law, The NC JOBS Act”
By Joe Wallin

The North Carolina General Assembly has a unique opportunity in front of it right now. It can pass a state-specific crowdfunding law known as the North Carolina JOBS Act.

You can read the bill here, which has already passed the NC House by a vote of 103 to 1.

The bill would allow North Carolina businesses to raise up to $1 million during any 12-month period from North Carolina residents in a crowdfunding campaign, and up to $2 million with audited financials. The funds could be raised from non-accredited investors, as well as accredited investors.

Joe Wallin
The bill has a good chance of passing in a form that would actually be usable. It also strikes the right balance between capital formation and investor protection.

The trouble with securities law exemptions on the books today is that many of them are not usable — except at great and impractical expense to businesses that want to use them. This puts entrepreneurs who want to raise money in a difficult spot, slows down or completely inhibits their ability to raise funds, and hampers economic growth.

This is the reason almost all startups raise money solely from accredited investors under what is known as Rule 506 of Regulation D. If you raise money under that rule, as long as you take money only from accredited investors, there are less complex and less costly requirements than other exemptions.

For example:

  • Rule 506 does not require companies to work with a registered broker-dealer (which is required under the federal crowdfunding law). 
  • Rule 506 does not require a company to have audited financials (which is required under the federal crowdfunding law if you are raising more than $500,000). 
  • Under Rule 506, you have to file a form known as Form D, but it is a short form, and you don’t have to file it until 15 days after you actually raise money. So, if you don’t succeed in raising money, you don’t have to file the form. 

Rule 506 is practical and usable, and that is why a very high percentage of financings fall under it. Other laws passed over the years to try to allow companies to raise money through the sale of securities languish on the books unused because they are impractical.

Of course, the trouble with Rule 506 is that you have to limit your offerings to accredited investors. There is no ability under Rule 506 to raise small amounts of money from lots of people, including non-accredited investors, in a crowdfunding campaign.

If you don’t know any accredited investors, raising funds can be tough. A real slog. Like persistence hunting.

Enter state level crowdfunding. Several states have realized that to support startups and small and emerging growing businesses, they need state securities law exemptions that are more usable and practical, yet balance capital formation with investor protection in a reasonable way. Wisconsin and Michigan passed state crowdfunding bills. Both Kansas and Georgia have regulations in place. (See Bill Carleton’s web site statecrowdfundinglaw.com for detail on the various state initiatives).

It is time for the North Carolina Senate to pass the NC JOBS Act in the short session beginning in May.

The North Carolina bill, H680, is sponsored by a bi-partisan group including Representatives Murry, Moffitt, Shepard, Hastings, R. Brawley, Brody, Brown, Cotham, Faircloth, Harrison, Jones, S. Martin, McGrady, R. Moore, Ramsey, S. Ross, Samuelson, Setzer, and Steinburg..

It is an important bill. It would send a signal to the entire world that North Carolina takes the business of starting and growing companies seriously, and is willing to amend its laws to bring them up to date with the 21st century.

You might ask: Isn’t a federal crowdfunding bill on the horizon? Shouldn’t we just wait for that?

The answer is no. The federal bill is too complex.

It will cost companies a lot to raise money in compliance with its requirements. For example, suppose you want to raise $1 million under the federal bill. You’re probably going to have to spend something on the order of $250,000 in legal, accounting and broker fees to raise the cash. That’s impractical. It doesn’t make sense. Unfortunately, the federal bill is going to go the way so many prior attempts to write sensible laws have gone. I suspect it will not be used nearly as much as advocates hoped. This is truly unfortunate.

But states have the opportunity to put their own laws in place that will actually work.

The NC JOBS Act would not put companies trying to raise money in such a difficult spot.

Joe Wallin is an attorney at Davis Wright Tremaine in Seattle. He’s the editor of the Startup Law Blog.




If you have not yet done so, now is the time to contact your state Senators with an email of your support for H680, the NC JOBS Act. It is very easy to do using the links we give below.
If you have any questions or comments, please email the JOBS NC Crowdfunding Team at jobsnc@nc.rr.com or contact Representative Murry’s office at murryla@ncleg.net.

Wednesday, March 5, 2014

CED Hosts Crowdfunding Panel at 'Raising the Dough' Series Event

The influential and respected North Carolina Council for Entrepreneurial Development (CED) will host a seminar called "Raising the Dough" for entrepreneurs looking for funding. A panel on crowdfunding including an overview and discussion of the NC JOBS Act will be included during the first session on March 11th. You can register for the event here.

About CED

CED's Mission: To identify, enable and promote high-growth, high-impact companies and to accelerate the entrepreneurial culture of the Research Triangle and North Carolina.

CED is a community of people inspired by entrepreneurship, and includes a wide range of members including start-up companies, more mature growth-stage firms, investors, service partners, academics, and individuals. All who wish to be part of this dynamic enterprise are invited to participate. CED  was founded in 1984, and later incorporated as a 501(c)3 nonprofit organization, to identify, enable and promote high-growth, high-impact companies and accelerate the entrepreneurial culture of the Research Triangle and North Carolina.  CED provides education, mentoring and capital formation resources to new and existing high-growth entrepreneurs through annual conferences, forums, workshops and programs on entrepreneurial management and finance.

Support the North Carolina JOBS Act:

If you have not yet done so, now is the time to contact your state legislators with an email of your support for  NC JOBS. It is very easy to do using the links we give below.
If you have any questions or comments, please email the JOBS NC Crowdfunding Team at jobsnc@nc.rr.com or contact Representative Murry’s office at murryla@ncleg.net.