Tuesday, August 19, 2014

Intrastate Crowdfunding is Officially Dead in North Carolina - For Now

We are sad to report that the NC JOBS Act, which would have enabled intrastate investment crowdfunding of small businesses and startups in our state, is now officially dead. After the original crowdfunding bill (H680) passed the NC House last year by a vote of 103 to 1, the bill fell victim to political gamesmanship in the NC Senate. The Senate leadership tried repeatedly to attach other more controversial legislation to the NC JOBS Act, and each of those attempts failed either in the Senate or when sent back to the House. The final attempt today was a bill entitled H1224, which bundled together 6 other provisions for sales taxes and corporate welfare along with the JOBS Act, and was also tied to two other bills that would provide amendments to H1224 if it was passed. A very contentious debate about the other provisions in the bill raged over the last week between the Senate and the House, in committees, and in the caucuses, with the ultimate result a final vote today of 47-54 against the bundled bill. This was the final bill to be considered by the legislature for the current session, which will adjourn tomorrow.

The failure by the NC Senate to bring up H680 as passed by the NC House for a vote on its own merits represents a significant lost opportunity for North Carolina small businesses, startups, and everyday investors. Ever since 2008, it has been extremely difficult for small business to get funding from banks and other sources, and the NC JOBS Act would have enabled a significant new source of funding all around the state, all while not costing the taxpayers a dime. Many other states have already passed similar crowdfunding exemptions over the last year, and businesses in those states are beginning to benefit. North Carolina was an early leader in proposing this idea, and the merits of it are clearly understood by state governments around the nation. Unfortunately the North Carolina Senate seems to have little interest in helping the small business community. Their top priority seems to be playing political games to try and get corporate welfare for huge corporations from out of state.

The NC JOBS Act team would like to thank all of those who supported this effort along the way, including chief sponsor Representative Tom Murry, Speaker Tillis,  Lt Governor Forest, the many sponsors from the NC House, the Triangle startup community, small business around the state, and the over 15,000 visitors to this blog who were tracking this effort, emailing and calling the legislature with their support, and spreading the word about the opportunity. We appreciate everything you did to help out.

Perhaps after the election this year, the new version of the NC Senate will be smarter than this one. We can only hope.




Wednesday, August 13, 2014

New Report Shows Crowdfunding Success Increases Follow Up Venture Funding

A new report from CB Insights, which covers the Venture Capital industry, shows that startups that have successful crowdfunding campaigns have a much better chance of attracting follow on venture funding. In a post about the report on WRALTechwire today, editor Rick Smith points out:

"Are North Carolina startups missing out on potential investments from venture capitalists because the state's general Assembly has yet to pass crowdfunding legislation?
A new report would indicate that's the case.
CB Insights, which tracks the venture capital industry, documents for the first time in a report out this week the importance of crowdfunding to startups not only for initial capital but also as a way to ignite interest from institutional investors. 
A copy of this report should be sent to every North Carolina Senator where the NC JOBS Act crowdfunding bill - passed overwhelmingly by the House - is caught up in a larger piece of legislation. (Our WRAL Capitol Bureau team says no action is expected anytime soon, by the way.)"

The post on WRALTechwire includes an excellent summary of the report. The full report can be read online.

We urge you to send the link to the WRALTechwire post and CB Insights Report to your NC Senator and the Senate leadership immediately, and ask the Senate to pass H680, the NC JOBS Act crowdfunding bill now!

Contact information for NC Legislators:

Representative Murry
 Tom.Murry@ncleg.net
 Office: 919-733-5602919-733-5602

Senator Berger
 Phil.Berger@ncleg.net
 Office: 919-733-5708919-733-5708

Senator Gunn
 Rick.Gunn@ncleg.net
 Office: 919-301-1446919-301-1446

Senator Meredith
 Wesley.Meredith@ncleg.net
 Office : 919-733-5776919-733-5776

Senator Rucho
 Bob.Rucho@ncleg.net
 Office: 919-733-5655919-733-5655

Senator Rabon
 Bill.Rabon@ncleg.net
 Office: 919-733-5963919-733-5963

Senator Apodaca
 Tom.Apodaca@ncleg.net
 Office: 919-733-5745919-733-5745


Saturday, August 2, 2014

NC JOBS Act Crowdfunding Update - House Rejects Senate Substitute Bill, Senate should vote on H680 on its own merits

Yesterday the NC House rejected the NC Senate's substitute consolidated bill H1224 which merged 5 separate and unrelated economic development bills into one. Part V of the bill is the original H680 NC JOBS Act crowdfunding bill which passed the NC House on its own by 103 to 1 last year. House members objected to provisions of several of the other bills that were included in H1224, but no objections were raised concerning Part V, the NC JOBS Act section. The NC Senate leadership has failed to bring the original H680 to a vote on its own merits, and instead has pursued a strategy of bundling the popular and innovative intrastate investment crowdfunding bill with other lesser known and more controversial bills in three different attempts to push them through the legislature. This strategy has failed. It is time for the Senate leadership to do the right thing and bring the original H680 up for a vote, and pass it before this session ends.

The Legislature has not yet formally adjourned, and the potential of reconvening again this session is still possible, so the future is uncertain. We call on the NC Senate to bring the original H680 NC JOBS Act bill up for a vote on its own. The North Carolina economy and job creation in our state will suffer if we fail to enable this new way of financing small businesses and startups across the state.

As of today, 12 states have already enabled intrastate investment crowdfunding, and 11 more states have started the process. Most have followed the lead of H680, which was the first intrastate crowdfunding legislation to be proposed and passed by any state house last year. This is now a nationwide trend, and North Carolina is in danger of missing the boat on this great opportunity.

Intrastate Crowdfunding Exemptions Enabled as of July 2014:
◦Alabama
◦Colorado
◦Georgia
◦Idaho
◦Indiana
◦Kansas
◦Maine
◦Maryland
◦Michigan
◦Tennessee
◦Washington
◦Wisconsin

Intrastate Crowdfunding Exemptions in Process as of July 2014:
◦Alaska
◦California
◦Connecticut
◦Florida
◦Illinois
◦ Missouri
◦North Carolina
◦New Jersey
◦South Carolina
◦Texas
◦Utah
◦Virginia

As we have emphasized from the beginning, the NC JOBS Act does not cost taxpayers a single dime. It is simply an exemption in our state securities law that enables a new way for small businesses and startups in our state to raise money with debt or equity, and allows any North Carolina citizen to invest in those opportunities provided the registration, reporting, limits, and disclosure rules in the bill are followed. Please see the FAQs for more details on the bill.

The fate of this bill is in the hands of the NC Senate leadership. This legislation enables a new type of financing known as intrastate investment crowdfunding. It has been endorsed by many of the top startup and business leaders in the Triangle community. The list includes endorsements from CEOs, founders, managing directors, partners, and investors at our leading startup accelerators, our leading venture capital funds, individual angel investors and angel funds, a leading CPA firm, the North Carolina Technology Association, the North Carolina Biotechnology Center, SAS Institute, UNC Chapel Hill Technology Development Center, Triangle area business attorneys, and many of our local technology startup CEOs. This is a strong showing of support that we received in a 72 hour period recently. These startup community leaders are representative of the over 14,000 startup and small business community members and everyday investors across our state that have visited our NC JOBS Act blog to learn more, and are excited about the possibilities to start and grow a new business, or expand an existing business, or invest in a favorite local business opportunity, and create more jobs.

We urge the Senate leadership to do the right thing, bring the original bill up for a vote, and pass H680.

Please call and email your expressions of support for H680 to the Senate Leadership. Senator Berger is Senate President Pro Tem, Senators Gunn and Meredith are the co-chairs of the Senate Commerce committee, and Senators Rucho and Rabon are the co-chairs of the Finance committee. Senator Apodaka is Chairman of the Rules Committee. Please ask them to move the original H680  bill as passed by the NC House forward. Representative Tom Murry is Chairman of the House Commerce Committee and the Chief Sponsor and creator of H680. The original bill needs quick action by the Senate before the end of the current session. Since H680 has already passed the Senate without changes or opposition as part of H1224, it will be very easy and quick to move it through the Senate and get this bill to the Governor's desk. We urge the Senate to get this done now!

Thank you for your support.

Best regards,
The NC JOBS Act Team

Contact information for NC Legislators:

Representative Murry
 Tom.Murry@ncleg.net
 Office: 919-733-5602

Senator Berger
 Phil.Berger@ncleg.net
 Office: 919-733-5708

Senator Gunn
 Rick.Gunn@ncleg.net
 Office: 919-301-1446

Senator Meredith
 Wesley.Meredith@ncleg.net
 Office : 919-733-5776

Senator Rucho
 Bob.Rucho@ncleg.net
 Office: 919-733-5655

Senator Rabon
 Bill.Rabon@ncleg.net
 Office: 919-733-5963

Senator Apodaca
 Tom.Apodaca@ncleg.net
 Office: 919-733-5745





Friday, August 1, 2014

NC JOBS Act Crowdfunding Update - One More Step to Go!

In the very early morning hours today after a late night session, the North Carolina Senate passed the conference committee compromise for H1224, the bill that includes the North Carolina JOBS Act crowdfunding exemption as Part V of the consolidated bill. This was after the House had sent the bill back to the conference committee requesting some changes to other parts of the bill. The current version of the bill can be read here. The crowdfunding exemption section starts on page 16.

The NC House now must pass the conference committee compromise for H1224, which will be brought to the House floor today or tomorrow before the House adjourns for the campaign season. The NC Senate has already adjourned. After this last step, the bill will be ready for the Governor's signature. We will update the blog as soon as we have more news. See press coverage at WRALTechwire.





Thursday, July 24, 2014

NC JOBS Act Update - H1224 Passes the NC Senate

Today the NC Senate passed H1224 which includes the NC JOBS Act H680 investment crowdfunding bill as Part V of the consolidated bill. The bill has been returned to the NC House for further consideration. We will provide further updates on the blog as they occur. Press coverage is available on WRALTechwire.


Wednesday, July 23, 2014

NC JOBS Act Update (Now Tracking as H1224 Part V)

Today the full NC Senate passed the second reading of H1224, a bill which combines the NC JOBS Act with other economic measures.

Yesterday the Senate Finance Committee merged H680 as Part V of House Bill H1224. The Committee Substitute (PCS) combines and enacts The Jump-Start Our Business Startups Act (The NC JOBS Act, H680 as previously passed by the House) and four other entirely separate economic development bills. The PCS combines all bills into one labeled as H1224 Local Sales Tax Options/Econ. Devpt. Changes Parts I, II, III, IV, and V. Part V Crowd Funding with the Invest NC Exemption is the same as the previous version of H680 passed by the NC House last year.

This is a change in process from the previous attempts to merge H680 with Senate bill S734, and to merge H680 with Senate bill S522.

The bill has been approved by the Senate Finance committee and as a second reading on the full Senate floor. The bill will be brought to a final Senate floor vote and then back to the House for approval.

We will post further updates on the blog. Information about the changes on the ncleg.net website will be updated soon. Press coverage can be viewed on  WRALTechwire and on WRAL.


Wednesday, July 16, 2014

NC JOBS Act Update (Now Tracking as H680 Part 1 and Part 2)

Today the NC Senate Commerce Committee passed with a positive recommendation by unanimous voice vote the latest version of H680. The Proposed Committee Substitute (PCS) combines and enacts The Jump-Start Our Business Startups Act (The NC JOBS Act, H680 as previously passed by the House) and an entirely separate economic development bill called The New Markets Jobs Act of 2014 (as defined by Senate Bill S522). The PCS combines both bills into one labeled as H680 Part 1 and Part 2.

This is a change in process from the previous attempt to merge H680 into Senate bill S734. This represents a major step forward in getting the NC JOBS Act passed during this session.

The bill has been referred to the Senate Finance committee to approve the financial measures of the combined bills. If approved, it will go to the full Senate for a floor vote, and then back to the House for approval.

We will post further updates on the blog. Information about the changes on the ncleg.net website will be updated soon. Press coverage can be viewed on ExitEvent and WRALTechwire.




Wednesday, June 25, 2014

NC JOBS Act Update

As of today, we are still waiting for action from the North Carolina Senate on the NC JOBS Act.

Two important updates:

Update 1:

There has been a significant grass roots effort over the last two weeks to encourage our Senators to pass this bill. The start-up and small business community has been emailing and calling key Senators, which is very helpful. Over the weekend, the NC JOBS Act team put together a Community Statement of Support, and got an excellent response. Many thanks to all of you that called, emailed, or signed the letter. 


The statement has been forwarded to the Senate along with this introduction:

Dear Senators:

Attached is the Community Statement of Support for the NC JOBS Act (H680) that our team worked on this weekend. We urge you to pass H680 this session.

This legislation enables a new type of financing in our state known as intrastate investment crowdfunding. It has been endorsed by many of the top start-up and business leaders in the Triangle community. The attached list includes endorsements from CEOs, Founders, Managing Directors, Partners, and Investors at our leading Start-up Accelerators, individual Angels and Funds, Venture Capital Funds, a leading CPA firm, the North Carolina Technology Association, the North Carolina Biotechnology Center, SAS Institute, UNC Chapel Hill Technology Development Center, Triangle business attorneys, and many of our local technology start-up CEOs. This is a strong showing of support that we received over the last 72 hours. These start-up community leaders are representative of the over 12,000 start-up and small business community members that have visited our NC JOBS Act blog to learn more, and are excited about the possibilities.

Please forward this letter of support to your colleagues in the NC Senate and House. Please help us make this new form of financing for start-ups and small businesses a reality so we can grow the economy and create more jobs in North Carolina. Pass H680 now.

Thank you.    

Best regards,

Mark Easley Sr.
The NC JOBS Act Team
www.jobsnc.blogspot.com

Update 2:

Lieutenant Governor Dan Forest has joined the community of supporters of the NC JOBS Act. We received this letter of support from his office.

Thank you for your e-mail on H680, The Jump-Start Our Business Start-Ups (JOBS) Act. Lieutenant Governor Dan Forest believes that this bill is an important step towards growing North Carolina businesses by allowing start-up companies and companies that wish to expand the ability to quickly raise capital from smaller investments, often called crowd-sourcing or crowd-funding. As a result, businesses will be able to establish themselves in their market on an expedited basis and employ more North Carolinians sooner--all while having many citizens invested in the company's success.  The Lieutenant Governor supports passage of this bill as a well-thought out mechanism to ease the burden on North Carolina's start-ups.

Rebekah Bradley
Office of the Lieutenant Governor
310 N Blount Street
Raleigh, NC 27601





Friday, June 6, 2014

Investment Crowdfunding Can Become a Reality in North Carolina This Year

The North Carolina JOBS Act enables a new way of funding startups and small business in our state known as investment crowdfunding. The FAQs and other posts on www.jobsnc.blogspot.com provide details and analysis of what the bill does and how it will work. The legislation (H680) passed the NC House by an almost unheard of bipartisan vote of 103 to 1 last June, and is now pending in the NC Senate for the short session beginning May 14th. So if everything goes as expected, 2014 will be the year that intrastate investment crowdfunding will become a reality in North Carolina.

Over the last year here in the U.S., there have been a number of important developments in the investment crowdfunding exemption story. Many states are following in the footsteps of Kansas and Georgia, who were the first to implement in-state investment crowdfunding exemptions by regulation, and North Carolina, where we were the first to introduce an exemption by legislation.

As of today seven states - Kansas, Georgia, Michigan, Wisconsin, WashingtonIndiana, and Alabama - have intrastate crowdfunding exemptions in place, four states - North Carolina, Florida, Texas and California - have legislation pending, and five more including Idaho, Colorado, Maine, Maryland and New Jersey are in various stages of considering the idea. Here is a comparison of several of these intrastate crowdfunding exemptions. 

Many more states are expected to join the intrastate investment crowdfunding movement because it grows the economy from the ground up and creates jobs locally.  And here is a statement from North Carolina Congressman Patrick McHenry, the original creator and sponsor of the the Federal JOBS Act, on why he supports state based solutions like NC JOBS

In the startup community, which is so important for North Carolina in both the technology and life sciences markets, a report in Entrepreneur Magazine says that crowdfunding is the fastest growing source of funding for startups. In addition, accredited investor crowdfunding sites like AngelList and FundersClub have proven how effective they can be in providing funding for high growth startups. As an example, just one of the investment crowdfunding sites called EquityNet has over 130 investment crowdfunding projects listed just in the biotech-pharmaceutical-healthcare category.

So what else has changed since last year?

Crowdfunding in general, and investment crowdfunding in particular have been growing very rapidly in the US and around the world. The biggest donation and rewards based site Kickstarter just announced that they surpassed $1B in pledges to crowdfunding campaigns hosted on their site.  Entrepreneur Magazine calls the growth of crowdfunding ‘epic’ and says the crowdfunding economy has tripled in 3 years and was over $5.1B in 2013. They also expect crowdfunding to provide a $65B boost to the world wide economy in 2014.

In the United Kingdom, where investment crowdfunding has been legal for over 3 years, the investment site CrowdCube has announced their stats on their 3rd birthday in 2014:
         
“The platform has raised £19.9 million (around $33 million) for 103 businesses, which Crowdcube anticipates will add 1900 jobs over the next three years. Darren Westlake, the company’s cofounder and CEO also mentioned that the company grew by 562 percent on the year before, and it sees over 100 applications per month. The company has 60,000 registered members.”

And that is just one of the many investment crowdfunding platforms operating in the UK, other parts of Europe, and in Australia.

Meanwhile, several types of investment crowdfunding have taken off like rockets in 2013. One is investment crowdfunding in startups for accredited investors on sites like AngelList, another one is called Peer-to-Peer (P2P) lending, where people get personal loans from the crowd, and a third is real estate crowdfunding, where local real estate development projects are funded by the community crowd.

Many more market segments are just beginning to use investment crowdfunding as a financing method. And venture capitalists are making major investments in a wide variety of crowdfunding platforms and services around the nation, because they see this as a major growth industry in the financial sector coming down the road.  A report by nowstreetwire has more details on these trends.

So what does all this mean to North Carolina?

It means we can benefit from these trends by helping our small businesses and startups to participate. We can make it much easier for them to find funding. And that funding will help them grow and create jobs. The NC JOBS Act investment crowdfunding exemption will be an important part of making it happen.

Support the North Carolina JOBS Act:

If you have not yet done so, now is the time to contact your state Senators with an email of your support for  H680, the NC JOBS Act. It is very easy to do using the links we give below.
If you have any questions or comments, please email the JOBS NC Crowdfunding Team at jobsnc@nc.rr.com or contact Representative Murry’s office at murryla@ncleg.net.


Wednesday, June 4, 2014

We Need Your Help with H680, the North Carolina JOBS Act, which Enables Investment Crowdfunding in North Carolina

Dear friends and supporters of the North Carolina small business and startup communities:

We are in the final stages of making investment crowdfunding a reality here in North Carolina with the passage of H680, the North Carolina JOBS Act. It has already passed the NC House last session by a vote of 103 to 1. We need your help to push it over the finish line in the NC Senate.

Please call and email your expressions of support to the Senate Leadership and your own NC Senator. Use this tool to find and contact your own North Carolina State Legislators and express your support. Senator Berger is Senate President Pro Tem, Senator Tarte and Senator Barringer are working to get the bill passed in the Senate, Senators Gunn and Meredith are the co-chairs of the Commerce committee, and Senators Rabon and Rucho are the co-chairs of the Finance committee. Senator Apodaka is Chairman of the Rules Committee. Please ask them to move H680 forward. Senators Pate, Brown, and Tillman are part of the Senate leadership, and Lt Governor Forest is also Senate President. Representative Murry is Chairman of the House Commerce Committee and the Chief Sponsor and creator of H680. The bill needs action by the Senate Commerce and Finance Committees, and a floor vote in the Senate before the end of the short session, which began on May 14th, 2014 and is currently in session. There are many competing priorites in the session, so we need to keep the NC JOBS Act near the top.

Representative Murry
Tom.Murry@ncleg.net
Office: 919-733-5602

Senator Berger
Phil.Berger@ncleg.net
Office: 919-733-5708

Senator Barringer
Tamara.Berringer@ncleg.net
Office: 919-733-5653

Senator Tarte
Jeff.Tarte@ncleg.net
Office: 919-715-3050

Senator Gunn
Rick.Gunn@ncleg.net
Office: 919-301-1446

Senator Meredith
Wesley.Meredith@ncleg.net
Office : 919-733-5776

Senator Rabon
Bill.Rabon@ncleg.net
Office: 919-733-5963

Senator Rucho
Bob.Rucho@ncleg.net
Office: 919-733-5655

Senator Pate
Louis.Pate@ncleg.net
Office: 919-733-5621

Senator Apodaca
Tom.Apodaca@ncleg.net
Office: 919-733-5745

Senator Brown
Harry.Brown@ncleg.net
Office: 919-715-3034

Senator Tillman
Jerry.Tillman@ncleg.net
Office: 919-733-5870

Lieutenant Governor Dan Forest
hal.weatherman@nc.gov
Office: 919-733-7350

Thanks for your help, and please forward this request to your contacts in the startup and small business communities.

Best regards,

NC JOBS Act of 2014 Team


Here is a suggestion for an email or phone conversation. All the Senators have legislative assistants who will answer your call during office hours, and pass on your request to the Senator. If the timing is right, many of the Senators will take your call as well. Please be courteous and respectful of their time when calling.

“I am (  ) with (  ). I am contacting the Senator with regards to H680, the NC JOBS Act. This bill, which creates a new way to fund startups and small business using investment crowdfunding, is a great opportunity to create jobs and improve the economy in North Carolina. It passed the House by a wide bipartisan vote of 103 to 1, and has support from the startup and small business communities of North Carolina. This bill needs action from the Senate during the short session and I urge you to pass this bill. Thanks for your support of NC JOBS and the small business community.”


Support the North Carolina JOBS Act:

If you have not yet done so, now is the time to contact your state Senators with an email of your support for  H680, the NC JOBS Act. It is very easy to do using the links we give below.
If you have any questions or comments, please email the JOBS NC Crowdfunding Team at jobsnc@nc.rr.com or contact Representative Murry’s office at murryla@ncleg.net.