Trenton, NJ – Legislation that would change New Jersey laws and regulations to help businesses take advantage of crowdfunding passed the Senate last Thursday. Specifically, S-712/A-2073 would provide exemptions from registration with the NJ Bureau of Securities for companies that want to offer intrastate crowdfunding investment opportunities. The total investment cannot exceed $1 million, and the investment from any single purchaser is capped at $5,000.
“At a time when conventional sources of financing are scarce, this legislation will help New Jersey’s innovators seek private capital from the investing public to develop their products or services right here in our state,” said state Sen. Joe Kyrillos (R-Middletown), a primary sponsor of the bill. “Crowdfunding will level the playing field for future employers, giving those without access to Wall Street a chance to gain startup capital quickly and grow their business with the support of the community.”
To qualify, the business would have to provide a description of the company, its business plan, the name of its shareholders and its minimum offering amount. A quarterly report to the company’s investors must also be provided.
"Small, privately owned businesses would be able to raise money through crowdfunding web portals that are currently closed to them. While web sites like “Kickstarter” and “Peerbackers” are often the first to be used for launching an idea, these donation-based sites are inadequate sustaining a starting a business,” explained NJBIA's Tyler Seville, executive director of INJ. "When entrepreneurs have a solid, complex business plan, they have the option of pursuing crowdfunding investment opportunities. Equity crowdfunding initiatives have proven successful in a handful of states, including Georgia and Kansas. By simplifying regulations on intrastate crowdfunding, more small businesses have the opportunity to receive capital needed to boost their startup and encourage growth."
To learn more about how your business can start crowdfunding, click here.
The bill heads to the Governor’s desk for his signature. The bill passed the Assembly floor in March.
To qualify, the business would have to provide a description of the company, its business plan, the name of its shareholders and its minimum offering amount. A quarterly report to the company’s investors must also be provided.
"Small, privately owned businesses would be able to raise money through crowdfunding web portals that are currently closed to them. While web sites like “Kickstarter” and “Peerbackers” are often the first to be used for launching an idea, these donation-based sites are inadequate sustaining a starting a business,” explained NJBIA's Tyler Seville, executive director of INJ. "When entrepreneurs have a solid, complex business plan, they have the option of pursuing crowdfunding investment opportunities. Equity crowdfunding initiatives have proven successful in a handful of states, including Georgia and Kansas. By simplifying regulations on intrastate crowdfunding, more small businesses have the opportunity to receive capital needed to boost their startup and encourage growth."
To learn more about how your business can start crowdfunding, click here.
The bill heads to the Governor’s desk for his signature. The bill passed the Assembly floor in March.
