On Tuesday (January 6th), Kentucky General Assemble will hold a session to discuss a bill that will use a new state-run crowdfunding platform. According to The Lane Report, Steve Riggs, D-Louisville, has prefiled legislation to create crowdfunding investment opportunities in the state for residents seeking to launch or expand a business.
Riggs’ legislation proposes the creation of the platform for Kentucky entrepreneurs that functions much like other websites such as Indiegogo or Kickstarter. Anyone can review the pitches and invest in those they find interesting and possibly profitable. Backers will be able to give up to $10,000 to businesses, which may seek up to $2 million.
Riggs noted that he thought up the crowdfunding platform during 2014’s National Conference of State Legislature, which included a session on the funding method’s potential. He shared the idea with the state’s business leaders.
“This is a way for Kentucky to help businesses to grow and create jobs,” Riggs explained. “Too often, good business ideas struggle to get off the ground because of the difficulty of raising capital. Crowdfunding is becoming an increasingly popular way for people to find the money to launch a product or service.”
Last August, Riggs announced he is filed a new crowdfunding legislation to bring the funding option to his growing, entrepreneurial state. The General Assembly will reconvene in January but the bill is up for discussion now.
He stated, “This form of investment, which enables entrepreneurs to tap into a pool of hundreds if not thousands of investors, has taken off in the last couple of years. Kickstarter is the most widely known effort, but we’re starting to see states localize this approach as well, which is making it easier for home-grown businesses to raise the money they need to get off the ground. I think its time for Kentucky to take part.”
The state’s representative revealed that similar legislation went into effect in Indiana, which allows individuals to invest up to $5,000 at a time while helping entrepreneurs raise up to $2 million. He also shared that there will be built-in safeguards in the bill to protect potential investor from fraud or if business plans fall through.
It was also reported that there has been several studies conducted that show more Kentucky residents have started their own businesses. The governor, Steve Beshear, recently noted that the SEI had improved dramatically and the Kauffman Foundation Index recently reported it was the fifth best state for entrepreneurial activity over the past two years.
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