Right now you can go on the Internet and donate to your favorite cause or startup business and get a t-shirt or maybe a free doughnut every week but you cannot invest in your favorite startup and get a share of stock.
Because securities laws govern the issuance of stock. You can’t invest in a company that hasn’t registered their stock, or qualified for an exemption from registration.
Registration is designed to protect both investors and legitimate issuers. The challenge is balancing investor protection with the interests of small businesses and entrepreneurs seeking to raise money.
As the result of a new federal law called the JOBS Act, you will soon be able to invest in companies through crowdfunding. This form of investing is known as “equity crowdfunding.” But until the U.S. Securities and Exchange Commission completes its regulations to allow equity crowdfunding, this form of raising money remains illegal if done on a nationwide basis.
However, if you are interested in using equity crowdfunding on a local basis, a growing number of states have enacted exemptions within existing federal law that allow local small businesses and entrepreneurs to use crowdfunding to help grow their businesses by tapping into the crowd within their state’s borders.
The North American Securities Administrators Association is pleased to offer resources to help investors and small business owners learn more about equity crowdfunding.
- Intrastate Crowdfunding Overview 2016
- Intrastate Crowdfunding Overview 2015
- Intrastate Crowdfunding Overview: 2014
To learn more about equity crowdfunding, contact your state securities regulator:
To learn if equity crowdfunding is legal in your state, or if your state is considering enacting crowdfunding legislation:
- Intrastate Crowdfunding Legislation/Regulation (as of October 16, 2016)
Note: This information is being provided for your convenience and is not intended as legal advice. The information is illustrative only and not an exhaustive list. Any questions should be directed to the appropriate state regulator.
To learn details of individual jurisdiction intrastate crowdfunding legislation or regulation:
To learn what you should know about equity crowdfunding as an investor or small business owner/entrepreneur:
Intrastate Crowdfunding In the News
- Following the Crowd: Oregon Seeks to Ease Funding Rules, December 3, 2014, Salem Statesman Journal
- Alabama Businesses Can Now Seek Local Investors, December 3, 2014, Dothan Eagle
- Why aren’t Michigan businesses raising money through crowd funding?, November 23, 2014, Lansing News
- Texas Securities Board approved rules for crowdfunding, October 22, 2014, Dallas Morning News
- New Mexico Proposes New Rule for Crowdfunding, September 25, 2014, Albuquerque Journal
- MobCraft Beer becomes first to use Wisconsin crowdfunding law, September 24, 2014, Milwauke Journal-Sentinel
- Crowdfunding new way to invest in Indiana, September 24, 2014, Muncie Free Press
- Georgia’s crowdfunding backers hope to raise interest, September 21, 2014, The Associated Press
- States Clear Way for Crowdfunding, August 21, 2014, Stateline/Pew Charitable Trusts
- District’s equity crowdfunding proposal would be good for small businesses, August 17, 2014, The Washington Post
- Texas set to allow crowdfunding investments for small businesses, August 12, 2014, Fort Worth Star-Telegram
- State Equity Crowdfunding Policies Hold Promise, May 28, 2014, Forbes
- States make own crowdfunding rules, rather than wait for SEC, May 5, 2014, The Deal
- Alabama governor signs crowd funding law, April 8, 2014, The Associated Press
- Maine House approves bill that would let entrepreneurs raise capital through crowdfunding, February 13, 2014, Bangor Daily News
- Michigan Governor Signs Intrastate Crowdfunding Exemption, December 31, 2013, Forbes
- Crowdfunding’ Gets State-Level Test Run, December 4, 2014, The Wall Street Journal