Wednesday, July 31, 2013

The North Carolina JOBS Act Moves to the Senate in 2014

As of today, we are halfway to our goal of passing the North Carolina Jump Start Our Business Start-ups (NC JOBS) Act. There is excellent support around the state and around the nation for this new type of financing for small business and start-ups using investment crowdfunding, and the bill passed the North Carolina House by an almost unheard of bipartisan vote of 103 to 1. The North Carolina Senate leadership was busy with some very important tax and budget issues and ran out of time to consider it this session. NC JOBS is a pro-small business, pro-jobs, bipartisan bill that doesn't cost the taxpayers a single penny and which allows North Carolina residents the opportunity to invest in their own future and economy in a safe and fair way, so we are confident it can get through the Senate next session.

The good news is, the NC JOBS Act is alive and well. The bill will still be active in the Senate when the North Carolina Legislature convenes next year in what is known as the 'short session' beginning on May 14, 2014. That means we will still be able to implement this opportunity in North Carolina, but it will be delayed until then.

In the meantime, we would like to thank all of our many supporters and friends who have helped us with this effort over the last 5 months, including the team that created the bill, the excellent advice and assistance we got from many experts in the crowdfunding industry nationwide, and the thousands of enthusiastic small business owners, start-up community members, and potential North Carolina investors who followed our progress on the blog and provided us with encouragement. North Carolina has an excellent and rapidly growing start-up community and we are proud to be a part of it.

We would also like to thank the crowdfunding platforms that have expressed an interest in coming to North Carolina to get this program off the ground. We can still do that under the accredited investor crowdfunding models now coming on-line, so we would encourage our partners to consider proceeding with this step in North Carolina. Please contact us to discuss in more detail if you have interest.

We would also invite supporters who have interest in doing something similar in their own state to contact the NC JOBS Team and we would be glad to share our experience and advice. Studying this blog and using the links to the legislation would be a great place to start. Then let us know what questions you have. So far Georgia and Kansas have gotten it done, and we would encourage you to help investment crowdfunding become a reality across the nation.

Onward to 2014, and thank you for your support.

Best regards,

The NC JOBS Crowdfunding Team


Thursday, June 20, 2013

NC JOBS Act Passes NC House with Near Unanimous Support

The North Carolina House of Representatives today passed the NC JOBS Act (H680) with near unanimous bipartisan support by a final vote of 103 to 1. Next stop is the North Carolina Senate. The NC JOBS Act is an intrastate exemption which enables a new way to finance small business in North Carolina using investment crowdfunding.

 Support the North Carolina JOBS Act:

If you have not yet done so, now is the time to contact your state legislators with an email of your support for NC JOBS. 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 19, 2013

North Carolina Technology Association (NCTA) Announces Support for the NC JOBS Act

NCTA
North Carolina Technology Association


June 18, 2013


The Honorable Tom Murry
North Carolina House of Representatives
16 W. Jones Street, Room 2121
Raleigh, NC 27601-1096

Re: H680 - NC JOBS Act

Dear Representative Murry:

Thank you for introducing H680, the NC JOBS Act of 2013, which enables a new form of financing for small business called investment crowdfunding. The North Carolina Technology Association is the statewide industry group for the tech sector, representing over 600 member companies that employ over 100,000 North Carolinians. We agree that the intrastate investment crowdfunding exemption as defined by H680 represents a great opportunity to fund new technology companies and create more jobs in North Carolina.

We like the fact that the exemption is a safe, fair, and easy to implement version of investment crowdfunding that is similar to the Reg D 506 funding model that is already used by hundreds of North Carolina start-ups every year. We also like the fact that the investor and small business protection requirements in the Act have been reviewed and enhanced by the North Carolina Secretary of State's Securities Division, the NC Bar Association Securities Committee, and crowdfunding industry experts including the NC JOBS crowdfunding team.

North Carolina has a reputation as a technology center and a great place to start a business, and the NC JOBS Act will make it even better. We urge all North Carolina legislators to support the NC JOBS Act.

Sincerely,

Brooks Raiford
President & CEO
North Carolina Technology Association
http://www.nctechnology.org/





Support the North Carolina JOBS Act:

If you have not yet done so, now is the time to contact your state legislators with an email of your support for NC JOBS. 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.


Tuesday, June 18, 2013

North Carolina's Council for Entrepreneurial Development (CED) Publishes Post about the NC JOBS Act

The influential and respected North Carolina Council for Entrepreneurial Development (CED) has published a guest post about the NC JOBS Act called North Carolina's Intrastate Crowdfunding Legislation by Mark Easley and Steve Reaser of the NC JOBS Team. The post provides a summary of the key features and benefits of NC JOBS.

About CED

CED's Mission: To identify, enable and promote high-growth, high-impact companies and to accelerate the entrepreneurial culture of the Research Triangle and North Carolina.

CED is a community of people inspired by entrepreneurship, and includes a wide range of members including start-up companies, more mature growth-stage firms, investors, service partners, academics, and individuals. All who wish to be part of this dynamic enterprise are invited to participate. CED  was founded in 1984, and later incorporated as a 501(c)3 nonprofit organization, to identify, enable and promote high-growth, high-impact companies and accelerate the entrepreneurial culture of the Research Triangle and North Carolina.  CED provides education, mentoring and capital formation resources to new and existing high-growth entrepreneurs through annual conferences, forums, workshops and programs on entrepreneurial management and finance.

Support the North Carolina JOBS Act:

If you have not yet done so, now is the time to contact your state legislators with an email of your support for  NC JOBS. 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.

Thursday, June 13, 2013

Crowdsourcing.org Publishes an Overview of the NC JOBS Act

The popular and influential crowdfunding industry website crowdsourcing.org has published a post about the NC JOBS Act called A Look at North Carolina's Intrastate Investment Crowdfunding Legislation. The guest post was written by Mark Easley and Steve Reaser of the NC JOBS Team, and provides a very good summary and overview of the key features and benefits of NC JOBS. Crowdsourcing.org is a respected and excellent source for information and news on crowdsourcing and crowdfunding from around the world.

Support the North Carolina JOBS Act:
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.

Friday, June 7, 2013

Smart Money Entrepreneurs Becomes the First Investment Crowdfunding Platform to Announce Support for NC JOBS Act

Here is the first formal announcement by a major investment crowdfunding platform pledging their support for the NC JOBS Act. Jeremy Andrews is the CEO of Smart Money Entrepreneurs (http://sme.vc), based in New York City, which specializes in equity and debt crowdfunding campaigns. Jeremy has pledged to create a fully compliant NC JOBS website which will allow North Carolina startups and existing businesses to use investment crowdfunding to finance their business with the help of North Carolina investors. In addition, Jeremy has some exciting news regarding a new crowdfunding oriented incubator he plans to open soon in the Raleigh/Durham area called Match Capital. Thanks to Jeremy and his team for partnering with North Carolina.

June 1st, 2013

To: Representative Tom Murry
NC House of Representatives
16 W. Jones Street, Room 2121
Raleigh, NC 27601-1096

From: Jeremy Andrews
Founder and CEO, Smart Money Entrepreneurs
http://sme.vc

Why We Support the NC JOBS Act of 2013
and Why NYC Entrepreneurs Are Calling North Carolina Their New Home

Dear Representative Murry:

I am contacting you to express my support for the NC JOBS Act of 2013 which enables a new form of financing for small business called investment crowdfunding. I am pleased to announce that my investment crowdfunding company, Smart Money Entrepreneurs, is ready to move forward with our plans to provide both equity and debt crowdfunding services to North Carolina as defined by NC JOBS.

A couple of weeks ago, I had the privilege of traveling to North Carolina to meet with members of the NC JOBS team as well as several prominent entrepreneurs in the Raleigh/Durham area.  While the area is well known for its sustained entrepreneurial growth over the years, I traveled to the state not knowing what to expect.  I must admit, it can feel as if New Yorkers are surrounded by a bubble, unaware of any events or activities that happen to take place outside the city.  It is no surprise that many entrepreneurs I have spoken with over the past few months were excited about coming down to Raleigh/Durham, but knew little about the entrepreneurial activity beforehand.

The Raleigh/Durham entrepreneurship ecosystem is alive and well, and has been for quite some time.  According to Forbes, Raleigh/Durham is #2 of the top 25 places to “Launch A Career” and the best place for female entrepreneurs.  While I read about what Raleigh/Durham had to offer, seeing it first hand was absolutely incredible.  Granted Raleigh/Durham has a history of hosting great companies like IBM, Cisco, SAS and RedHat in their state, and now many startup communities are sprouting up and startups are thriving here.

Besides enjoying the beauty and majesty of the state, the goal of my trip was to better understand how SME and Match Capital could work with North Carolina as you prepare to pass the NC JOBS ACT.  To recap, the federal JOBS Act was passed on April 5, 2012 by President Obama with the intention of bringing much needed capital to startups and small business.  While sites like Kickstarter and Indiegogo were able to operate legally before the JOBS ACT was signed into law, sites like SME and Match Capital that allow unaccredited investors to put capital in a business for an equity or debt have been denied this privilege since the 1930’s.

At SME and Match Capital, we always believe that the implementation of the JOBS Act could and should ultimately be offered on a state by state basis.   Currently four states, Kansas, Washington, Georgia, and North Carolina have either passed or are in the process of passing legislation and exemptions allowing unaccredited investors to invest.

I am also pleased to announce that we will soon be opening a facility in the Raleigh/Durham area for Match Capital, our new crowdfunding incubator. When we started Match Capital early this year, our goal was to help great entrepreneurs get the funding they needed to create jobs and foster innovation and economic growth.  We believe it is up to the entrepreneurs in the state of North Carolina to show the rest of the country that great startups are employing people, creating economic wealth for the local NC community, and fostering real innovation in a variety of high growth industries.  Creating a safe environment in which the NC community can fund startups to foster this growth is the main focus of Match Capital and SME.  As we look to break ground this summer in NC, we wanted the crowd to become heavily involved with Match Capital, and have set up a crowdfunding campaign here.   With the help of the crowd, North Carolina will become the premier state in the nation allowing unaccredited investors to place capital into startups via equity and debt.

We are currently recruiting some of the best entrepreneurs from NYC and California to come to North Carolina to be part of this crowdfunding process with us.  At SME and Match Capital, we are excited about bringing the first successful investment crowdfunding deals in the US to North Carolina and appreciate your support of this innovative movement.

Sincerely,
Jeremy Andrews

Jeremy Andrews is the Founder of Smart Money Entrepreneurs (SME), an equity/debt crowdfunding platform and is also the founder of Match Capital Ventures, a crowdfunding incubator in Raleigh/Durham, NC.

Jeremy also created a blog post about NC JOBS.

Trenia Today is the owner and founder of Trenia Today International Inc., a consulting and coaching firm specializing in helping small business owners and entrepreneurs benefit from digital marketing practices.

You can find out more about SME and Match Capital by going to: SME.VC  or MATCHCAPITAL.VC
You can connect with Jeremy and Trenia on Twitter or Facebook

Support the North Carolina JOBS Act:
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 5, 2013

4 Reasons the NC JOBS Act Bill Beats the National Crowdfunding Exemption


#1 -- Sooner

Investment Crowdfunding will be available in North Carolina well before it is available nationwide. The regulations for the national crowdfunding exemption are likely to remain unavailable until at least late in 2014, with lots of complex implementation time required on top of that. In contrast, since NC JOBS is well defined and much easier to implement, we expect to see companies raising money under NC JOBS in the second half of 2014.

#2 -- Cheaper

Raising money under the national crowdfunding exemption is expected to be rather expensive; some estimates suggest that as much as 15% of the money raised will go to “overhead” expenses rather than being used to grow the business.

There are two ways the NC JOBS Exemption keeps costs down:

First, audited financials -- which can be very expensive to produce -- are not required if the issuing company is raising $1,000,000 or less. (A company raising between $1,000,000 and $2,000,000 will typically have more operational history, and in these cases the cost of audited financials is a reasonable burden to help protect potential investors.)

Secondly, portals using the national exemption will face extensive costs to comply with FINRA regulation -- and those costs will be certainly be passed along to the companies that are fundraising.

Investors would rather see their dollars being used to build a company rather than going to lawyers and accountants for meeting excessive regulations. Wouldn’t you?

#3 -- Simpler

The amount that can be invested by any non-accredited person is a flat $2,000.

This is much more straightforward and safer than the national version which uses a sliding scale based on investor income or net worth -- which could lead to a situation where startup companies are forced to handle highly sensitive financial information of potential investors in order to ensure that they do not lose their exemption.

With NC JOBS issuing companies simply have to make sure to accept only $2,000 or less from each non-accredited investor.

#4 -- Angel-Friendly

Accredited investors are excluded from this $2,000 cap -- they can invest as much as they choose.

When you look at the data from countries where investment crowdfunding is already legal, you find that most successful raises are accomplished through a combination of many small ($1,000 to $2,500) investments along with a few more substantial sums ($25,000 to $100,000).

In order to support this “80/20 rule” effect, a crowdfunding exemption must support both smaller non-accredited investors as well as more experienced “angel” investors.

A company raising money should benefit from a mix of smaller and larger investors as well -- your “team” has just grown to a whole new level as you can tap into a crowd of passionate supporters as well as some more experienced and connected investors.

Support the North Carolina JOBS Act:
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.

Sunday, June 2, 2013

Investment Crowdfunding A Spectacular Success in the U.K.

As the NC JOBS Act moves through the North Carolina legislature, it is helpful to look at the success of investment crowdfunding in the United Kingdom, where it has already been legal and in operation for over 2 years. In this very interesting post, one of the U.K. investment crowdfunding sites called Crowdcube celebrates the 50th successful business funding since the site went live in February of 2011.

Some impressive results on Crowdcube since then (financial amounts converted to US $):

  • The first company to hit their target raised $114,000 from 82 investors
  • 54 businesses have been funded to date
  • $13.9M has been raised so far
  • 36,000 investors have registered on Crowdcube
  • The largest single raise was $1.5M by The Rushmore Group

And that is for just one of the crowdfunding platforms in the U.K., and there are several other very successful sites. More interesting facts and milestones are available on the Crowdcube post.

So what does this mean for North Carolina? It proves that investment crowdfunding works, that small businesses can get the financing they need, that investors are willing and able to invest with this method, and that it can be done safely and fairly.

It is time to pass H680, the NC JOBS Act and enable this new and very successful method of financing small business in North Carolina.

Support the North Carolina JOBS Act of 2013:
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.

Thursday, May 30, 2013

North Carolina is a Great State for Business, NC JOBS Act Makes it Better

The NC JOBS Act enables a new way to finance start-ups and small business in North Carolina using investment crowdfunding. North Carolina is already a great place to start and grow a business, and NC JOBS will make it even better. North Carolina is the 10th largest state by population and the 10th largest state by GDP. Recently both CNBC.com and Forbes.com put together their own lists of Best States for Business in 2012, and included a variety of factors such as cost of doing business, quality of life, workforce, technology innovation and more. North Carolina ranked 4th in the nation in the CNBC list and also ranked 4th in the Forbes list.

North Carolina is a great place to start and grow a business, and the NC JOBS Act will make that even better by enabling a safe and fair way for more North Carolina entrepreneurs to finance their business.

Support the North Carolina JOBS Act:
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.

More Analysis of the NC JOBS Act

Prominent national crowdfunding and legal expert William Carleton continues to track and analyze the NC JOBS Act. His latest post is called North Carolina Iterates Investment Crowdfunding Bill.

Support the North Carolina JOBS Act

Wednesday, May 8, 2013

NC JOBS Act Passes House Commerce Committee

The NC JOBS Act achieved its first major milestone today when it was passed by the North Carolina House Commerce and Jobs Committee with a near unanimous vote. The next step is a review by the Finance Committee of the House.

Support the North Carolina JOBS Act:
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.


Thursday, May 2, 2013

"One State is Leading in Investment Crowdfunding: North Carolina!" David Drake post on Forbes.com

Noted investment crowdfunding industry executive David Drake posted a column on Forbes.com in support of the North Carolina JOBS Act. His post is titled "One State is Leading in Investment Crowdfunding: Guess Which One?" His answer: North Carolina. David is the Founder and Chairman of New York private equity firm LDJ Capital and is the also the Founder and Chairman of TheSohoLoft.com, a global financial media and events company that covers investment crowdfunding.


Support the North Carolina JOBS Act:
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, May 1, 2013

Congressman Patrick McHenry Supports the NC JOBS Act

Congressman Patrick McHenry is an innovative leader and respected investment crowdfunding expert who represents the 10th Congressional District in western North Carolina. Congressman McHenry was the original and lead sponsor of the federal JOBS Act which received biparisan support and was signed into law by the President last year. He expressed his support for the North Carolina JOBS Act on a facebook post on April 30th.

The Congressman wrote:

"New crowdfunding legislation will pave the way for startups and entrepreneurs to grow their businesses and fuel job creation around the country. While the SEC has delayed implementation of crowdfunding rules at the federal level, I applaud North Carolina leaders such as Tom Murry for taking the initiative of offering crowdfunding across the state. From small craft breweries in Asheville to high-tech startups in RTP, crowdfunding offers a new source of capital to entrepreneurs chasing the American Dream."




Support the North Carolina JOBS Act:
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.


Friday, April 26, 2013

Crowdfunding is In the Future of Small Business Financing


New legislation has been introduced in North Carolina which enables a new way to finance small business called investment crowdfunding. The bill is known as the North Carolina Jump-Start Our Business Start-ups (NC JOBS) Act.

Recently North Carolina’s Council for Entrepreneurial Development (CED) sponsored a seminar called “Tips and Tricks for a Successful Crowdfunding Campaign” at American Underground in Durham. The event was packed with entrepreneurs, marketers, and investors who wanted to know more about the subject, and from the enthusiasm in the room it was pretty obvious that this is an idea whose time has come. A recent report on Yahoo Finance showed that just last year, over $2.7B was raised through crowdfunding.

The speaker was Candace Klein, the CEO and Founder of SoMoLend, a crowdfunding lending platform, and Bad Girl Ventures which helps women owned startups through education and micro lending. Candace is also an attorney and noted national expert on crowdfunding.

Candace has managed dozens of successful crowdfunding campaigns and has learned lots of best practices along the way, which she was kind enough to share. Candace breaks down crowdfunding into four types: donation, rewards, debt, and equity. The first two types are very familiar because of the success of platforms like Kickstarter and Indiegogo. The debt type is represented by sites like SoMoLend. The equity investment crowdfunding type is not yet legal at the national level, because everyone is waiting on the regulations from the SEC regarding the federal JOBS Act. There are a number of platforms that are ready and able to implement equity crowdfunding, and many resources can be found on the industry site crowdsourcing.org. Unfortunately, the federal version has become very complex, has been delayed, and may be almost impossible to implement as intended. So Kansas and Georgia have already created their own investment crowdfunding exemptions for in-state business and small investors, and that process is also underway in North Carolina and other states.

Candace emphasized that any crowdfunding campaign is just that: a time limited campaign that requires planning, schedules, promotion, creativity, and most importantly, full time execution while the campaign is live on your crowdfunding platform of choice. She reviewed best practices for successful campaigns, such as targeting a specific passionate and narrow audience, raising 25% of your goal from your best supporters before the campaign launches to build momentum, and making the story about you and your team as much or more than the product or program. And have a good video! She also outlined the biggest mistakes made by unsuccessful campaigns, such as setting unrealistic expectations for fundraising and schedules, and not doing the daily marketing needed to support the crowdfunding campaign.

We see crowdfunding as the future of funding for all kinds of business startups, not just technology business, but small business of many types, including for-profit and non-profit businesses. Most small business startups need loans from friends and family, and in the old days, banks. But the banks have cut way back on lending, especially to new businesses. Angels and VCs tend to only invest in the big ideas that can be quickly scaled into large companies. Crowdfunding allows entrepreneurs of all types to easily and safely expand the number of supporters they can line up to fund their business by donation, rewards, debt, or equity, while at the same time giving them early validation on the demand for their business product or service idea. This kind of validation (what we in the startup community refer to as traction) is key to growing the business and getting more financing further down the road when and if it is needed.

It has been fascinating to watch the creative ways that people have come up with to use crowdfunding so far, and the enthusiasm with which all kinds of small investors make good faith donations and investments in people and organizations they believe in. This new funding method will also help create many new jobs in new and existing businesses as we move forward. It also allows small investors the opportunity to participate in the economic growth of their own communities, something they had not been enabled to do before.

If you need financing for a new North Carolina business, a new product, a new service, a creative project, or a non-profit, take a look at crowdfunding, and support the NC JOBS Act of 2013.

Support the North Carolina JOBS Act:
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.

Triangle Startup Factory Spreads the Word to the StartUp Community

Durham start-up accelerator Triangle StartUp Factory is helping to spread the word about the NC JOBS Act of 2013 to the start-up community around the state. See the post on their popular TriangleTechTalk blog.



Support the North Carolina JOBS Act:



Friday, April 19, 2013

A Closer Look at the North Carolina JOBS Act

The North Carolina approach to investment crowdfunding has been called “Brilliant!” by prominent national crowdfunding and legal expert William Carleton. His post about the bill is called “5 Ways a North Carolina Bill puts the Crowd back in Crowdfunding” and it is worth reading.

Why is this legislation best-in-breed? The answer lies in the approach that was taken in drafting this bill. In a nutshell, a small but focused team of local entrepreneurs and investors carefully examined the crowdfunding legislation that has been passed in Kansas and Georgia, as well as draft legislation in other states. They then created the NC JOBS Act by selecting the best features of each exemption, while avoiding the problems contained in the stalled and complex federal JOBS Act.
  
The bill is sponsored by Representatives Tom Murry, Tim D. Moffit, Phil Shepard, and Kelley E. Hastings and has been filed with the North Carolina legislature.

The NC JOBS Act has a number of provisions designed to help small businesses in North Carolina raise money while protecting investors:
  • The issuer must be a North Carolina business.
  • The investor must be a North Carolina resident.
This bill is about helping local companies grow and create jobs. Keeping things local helps create a community of investors and small businesses building the future together. (It is also a requirement of the federal securities law that this North Carolina exemption will fall under.)
  • Fundraising Cap: Within a 12-month period issuers may raise up to $1,000,000 without audited financials, or $2,000,000 with audited financials.
These days a startup can do wonders with well under $1 million, and many small businesses can be launched and achieve profitability with a fundraise of this size. Companies in this stage are unlikely to have any substantial financial history, so requiring them to obtain an external audit (which can easily cost $25,000) is an unreasonable burden for the amount of investor protection it provides. Keep in mind that companies would have to spend this money up front with no guarantee that they will complete their raise. Companies that are somewhat later stage, who need more than $1 million to step on the gas and accelerate growth are likely to have a more substantial financial history, and requiring verification of the accuracy of their financial statements is an appropriate check and balance.
  • Investor Cap: Investors may invest no more than $2000 per issuer, unless they are accredited.
Simple, and allows for the “80/20 rule” whereby a few large investments along with many smaller ones complete a crowdfunding round.

Two points to consider:

First, one of the flaws of the Federal crowdfunding exemption is that the allowed investment amount is dependent on a complex set of rules regarding investor income. In practice this means that startups or portals must ask for and collect very sensitive personal data of all potential investors. What can possibly go wrong, right? The North Carolina cap is much easier to understand and implement for both small investors and small businesses.
Secondly, it is imperative that there is a clean mechanism to allow established accredited investors to participate along with the crowd… many crowdfunded raises will be accomplished with a combination of many small investments and a few large checks.
  • Intermediaries: Issuers may use a professional crowdfunding platform, but it is not required.
While we don’t see a reason to be heavy-handed, complying with securities laws is serious business… there are consequences to making a mistake which renders an exemption null and void; and thus there are good reasons that many small businesses might opt to let someone else shoulder the burden of making sure all the t’s are crossed in any investment crowdfunding offering.
  • Reporting: Quarterly reports must be provided to all investors discussing management compensation, operating results, and financial condition.
  • Solicitation: Issuers and sellers are permitted to promote the offering publicly, after filing notice with the state securities regulatory agency.
  • Communicating Risk: Investors are required to certify in writing by the time of sale that they understand the risks of unregistered securities and may lose their entire investment.
  • Liability: Officers and directors are protected from liability except in the case of fraud or breach of fiduciary duty.
These four items all flow from the same principle: open and complete exchange of information; and then allow small investors to make their own decisions and accept the results.

Clearly companies must provide investors with a full and complete picture of the state of the business and the opportunity they are pursuing. And in exchange, as long as the company raising money provides investors with all of the relevant information, then it is in the best interest of the public for the government to allow these proposed investment transactions… and similarly it is in the interest of business creation and employment growth to protect company founders from personal liability due to honest failure of a venture.

We cannot build tomorrow without pushing the boundaries of today… but if we embark on this journey together – North Carolina investors and entrepreneurs – then we truly can take our great state to a whole new level.

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.

Support the North Carolina JOBS Act:

Wednesday, April 17, 2013

North Carolina JOBS Act Called "Brilliant" and "worthy of support"


The North Carolina approach to investment crowdfunding has been called “Brilliant!” and “worthy of support” by prominent national crowdfunding and legal expert William Carleton. His post about the bill is called “5 Ways a North Carolina Bill puts the Crowd back in Crowdfunding

Thursday, April 11, 2013

North Carolina JOBS Act Enables Investment Crowdfunding


Contact: Andrew Johnstone

NEWS RELEASE
For Immediate Release- 4/10/13

North Carolina JOBS Act of 2013 Enables Investment Crowdfunding

Morrisville, NC - Representative Tom Murry, working with local business owners and investors, has filed legislation to help local small businesses raise capital through crowdfunding.

Start-up companies and small businesses play a critical role in creating new jobs and growing the economy. Crowdfunding, or raising money through small contributions from a large number of investors, allows smaller enterprises in North Carolina to have access to the capital they need to initiate new business ventures as well as to expand operations and hire additional staff.

Crowdfunding legislation is one part of Rep. Murry’s commitment to North Carolina small businesses and entrepreneurs. “I think this idea is long overdue. Crowdfunding received bipartisan support in Congress, and I expect it will get the same here in North Carolina. I’d like to thank my co-sponsors and look forward to seeing the Governor sign this into law this session,” said Rep. Murry.

“As an angel investor, I see this as the future of funding for all kinds of business startups and new products and services, not just technology business, but small business of many types” said local Morrisville investor Mark Easley.

By facilitating investment with appropriate disclosures to protect the interests of North Carolina investors, the General Assembly can promote the formation and growth of smaller businesses, allowing North Carolina residents to invest in North Carolina companies unencumbered by excessive government regulation.

"We have the opportunity to bring this powerful method of capital formation to North Carolina now, and to do so in a way which will put North Carolina ahead of the pack" said local entrepreneur Steve Reaser.


Kansas and Georgia have already passed similar investment crowdfunding exemptions.

Representative Tom Murry is serving his second term representing parts of Cary, Apex, Morrisville, and New Hill. Rep. Murry is Chair of the House Commerce and Job Development Committee. Rep. Murry was ranked as the “most effective freshman” in 2011 by the nonpartisan North Carolina Center for Public Policy Research. Tom and his wife Tamara live in Morrisville’s Breckenridge neighborhood and have two daughters. The Murrys attend College Park Baptist Church in Cary.
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About the NC JOBS Crowdfunding Team

The North Carolina Jump-Start Our Business Start-Ups Act is supported by legislators and citizens to enable a new way to help finance small business in North Carolina using investment crowdfunding.

Primary Sponsors of the North Carolina General Assembly House Bill:

Representative Tom Murry
Representative Tim D. Moffitt
Representative Phil Shepard
Representative Kelly E. Hastings



Representative Tom Murry

Representative Tom Murry is serving his second term representing parts of Cary, Apex, Morrisville, and New Hill.  Rep. Murry is Chair of the House Commerce and Job Development Committee.  Rep. Murry was ranked as the “most effective freshman” in 2011 by the nonpartisan North Carolina Center for Public Policy Research.  Tom and his wife Tamara live in Morrisville’s Breckenridge neighborhood and have two daughters.  The Murrys attend College Park Baptist Church in Cary.

Citizen Supporters of the NC JOBS Act:

Steve Reaser

Entrepreneur and investor, Steve has been active in crowdfunding since November 2011. Co-founder of Funding Launchpad -- an equity and rewards crowdfunding platform -- and founding member of the Crowdfunding Professionals Association (CfPA) and active member of the CrowdFunding Intermediary Regulatory Advocates (CFIRA). Prior to Funding Launchpad Steve co-founded an educational technology company, helping grow it to over one million paid users. Mechanical Engineer, Cornell.

Mark Easley

Mark Easley has been advising startups in the Research Triangle Park area of North Carolina since 2000 after a 25 year technology career in engineering, marketing, and sales in Silicon Valley. Mark has experience in the semiconductor business and related software and development tool products. In addition to his startup advisor activities, he has been on the executive board of a Raleigh/Durham area angel investor group and is a member of the Council for Entrepreneurial Development.

Nick Bhargava

Nick Bhargava is a Triangle entrepreneur and consultant. He specializes in financial innovation. His first startup, Motaavi, was heavily involved in the federal JOBS Act legislation and was an NC IDEA grant winner. Prior to that, he worked for the Financial Services Roundtable, the Securities Exchange Commission, and FINRA. He has also worked for TD Waterhouse and RBC Financial Group. His new startup is a financial services disruptor called Groundfloor.us.

Contact the JOBS NC Crowdfunding Team


Support the North Carolina JOBS Act: