Houston-based Crudefunders recently debuted its crowdfunding platform that offers Texans a chance to own some of the state’s oil wells. It has become the first out of two funding portals to be approved by the Texas State Securities Board.
According to Dallas Business Journal, Crudefunders Portal Texas LLC received its approval from the state on February 9th, which gave it the green light to allow non-accredited investors a chance to fund up to $5,000 in oil and gas projects. The platform’s partner, David Hollowell stated, “It was a big deal for our company. This could bring a paradigm shift to the industry.”
The platform vetted 60 projects and drew interest from nearly 600 backers before. Co-founder David Taylor revealed, “We were anticipating a slow and steady response. The response has been overwhelming in investor reach outs.”
During a recent interview with Midland Reporter-Telegram Taylor explained that Crudefunders’ story began in 2012 after President Obama signed the JOBS, Act, which legalized equity crowdfunding and enabling individuals to invest in start-up companies in exchange for equity.
Non-accredited investors that use Crudefunders will be able to fund $1,000 to $5,000 in projects that pass the platform’s vetting process. Any campaigns that fail to reach funding goals will return any money to backers. Co-founder Allen Fine explained, “Oil wells are kind of binary. They succeed or you run into risk, but with micro investment amounts you can spread risk over multiple projects.”
Taylor then added that Crudefunders is limited to companies that are based and operate in Texas; projects are limited to those carried out in the state and investors must be Texans. The platform is set to post its first three projects on Wednesday (February 25th).
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