Just last February I was writing one of my last posts, offering hope for a thawing of otherwise frozen capital markets through the use of the intrastate offering exemption in North Carolina. All we needed was the General Assembly to pass a bit of legislation--the Jumpstart Our Business Start-ups (the NC JOBS Act) (or former H680). But the grips of winter hit the General Assembly during a very long “short session” and the deep freeze set in on the NC JOBS Act. The bill (which passed the House in 2013 with near unanimous support) failed to make it out of the Senate or anywhere close to the Governor’s desk for signature.
Those of us supporting the NC JOBS Act sat frozen as we watched other states spring ahead of us. Over a dozen states now have adopted intrastate crowdfunding provisions. Champions of the legislation, such as the NC JOBS Act original House sponsor, former Rep. Tom Murry, fell in the November elections; leaving questions of whether there was any hope for the future of intrastate crowdfunding in North Carolina.
Although there are several similar bills currently under consideration, NC PACES is expected to be introduced to the General Assembly soon. Touted by Governor McCrory as part of his Innovation-to-Jobs plan, this new bill, which is expected to closely mirror the NC JOBS Act bill, allows North Carolina businesses to access capital locally and flexibly. Whether sourcing capital from the “crowd” through the use of the internet or through a more traditional “friends-and-family” approach, the NC PACES Act facilitates investment by North Carolina residents in North Carolina companies. The NC PACES Act smooths the way for smaller North Carolina companies to access funds from local investors so they can grow their businesses here.
Access to capital creates jobs and promotes innovation, leading to new business ideas and further opportunities for growth in our State—creating a cycle of abundance for North Carolina entrepreneurs, North Carolina investors and North Carolina workers.
Look soon for a more detailed discussion of the NC PACES Act.
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