Potential rules guiding investment crowdfunding will go to the full House for a vote in Virginia next week. The legislation has been released by the Commerce and Labor Committee and will now take the next step towards becoming law. The bill was sponsored by Del. Scott Taylor of Virginia Beach. Taylor was quoted in the Augusta Free Press on the bill;
“Crowdfunding is a recent innovation to help entrepreneurs get their companies off the ground and find the capital to grow. My bill would eliminate many of the regulatory stumbling blocks for a business looking to take advantage of the opportunity to solicit investments by crowdfunding. There is no doubt this bill will enable Virginians, investing in Virginia companies, to create jobs.”
“Small businesses and startups are the backbone of our economy and create well more than half of new jobs in Virginia. The NFIB, the Voice of Small Business in Virginia, supports this proposal to allow Virginians to invest in small businesses through crowdfunding websites. It would give entrepreneurs access to more financial resources and provide oversight that would give confidence to investors.”
According to the current version of the investment crowdfunding bill that covers both debt and equity, a limit of $2 million has been placed on equity offers. Individual Virginia investors may participate up to $10,000 – unless they are “accredited” as defined by existing federal definitions. The State Corporation Commission has been given fairly wide leeway in adjusting requirements going forward but must report findings each year beginning in July of 2016.
Virginia is just the latest state to see the benefits of facilitating capital for small enterprise. In lieu of working federal laws, a growing number of states continue to push forward with their own state rules hoping to boost local economic growth.
H/T Sam Guzik
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