VestLo is an intrastate crowdfunding platform operating in Illinois. It was set up in 2015 by Howard Orloff and Hector Robles. Anthony Zeoli, a Crowdfund Insider Senior Contributor and Chicago based attorney, has advised the firm on its operation. Zeoli is also the main author of the Illinois crowdfunding exemption. Signed into law in July of 2015, the Illinois Intrastate Crowdfunding Bill (HB 3429) became actionable this year.
— Howard Orloff (@CrowdFundSites) September 15, 2016
The Illinois crowdfunding exemption is far more robust than federal rules under Title III of the JOBS Act also called Reg CF. In Illinois, an early stage company may raise up to $4 million from either accredited or non accredited investors. Under Title III an issuer may raise up to $1 million. The Illinois rules provide that non-accredited investors are capped at $5000 per year into crowdfunded issuers. Accredited investors may invest as much as they like (inexplicably, they are capped under Title III).
Recently, VestLo listed their first offer: Cardfrenzy – a franchising program. Only Illinois residents may participate in the offer so the details require registration first but we asked Zeoli to comment on Illinois’ first intrastate crowdfunding offer;
“As the author of the Illinois intrastate crowdfunding law I cannot express how thrilled I am to see if finally being used. It took a lot longer than expected to get here but Illinois intrastate crowdfunding is already looking like it will be a game changer for Illinois companies like Cardfrenzy who are looking to find the funding necessary to grow and get to that next level,” said Zeoli. “While this is truly a monumental step, this is only the first offering and there are several others expected to be released before year end.”
Some observers believe Intrastate exemptions may become more impactful than Reg CF. Providing access to small companies that otherwise would struggle to grow. Today there are over 30 states that have enacted intrastate laws. Some good, others not so much. There is also the possiblitiy that Congress may decide to fix what undermines the federal rules – perhaps making some intrastate rules moot. Only time will tell.
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