North Carolina has taken another step towards enacting an intrastate crowdfunding law. As reported last year, a bill nearly passed but in the end did not have enough support to cross the line. In February we shared the NC House had introduced a bill. According to JobsNC, the Senate has filed the North Carolina Providing Access to Capital for Entrepreneurs and Small Business Act. While the name is long, the acronym is pretty cool: PACES (Senate Bill S481).
The primary sponsors of the bill are Senator Barringer, Senator Hise, and Senator Gunn. and is said to have the support of both the Governor and Commerce Secretary Skvarla.
The North Carolina model allows startups and small business to raise capital as debt or equity, but with a couple of new ideas allowed by the exemption. Some key features of the exemption:
- The exemption allows accredited or non-accredited North Carolina resident investors to invest in equity or debt offerings from a North Carolina company provided the disclosure, reporting, registration, and limits described in the exemption are followed.
- A North Carolina company is allowed to promote the offering to North Carolina residents via the web or any other method provided the disclosure, reporting, registration, and limits described in the exemption are followed.
- A North Carolina company may raise up to $1M with non-reviewed financials, or up the $2M with reviewed or audited financials.
- Accredited North Carolina investors may invest any amount up to the offering limit, and non-accredited North Carolina investors may invest up to $5,000 annually per issuing company.
It appears there is a very determined push to get this through the legislative process and on the desk of the Governor to sign. But then providing capital to SME’s that will then go on to create jobs for the local economy is probably a good thing.