|Governor Pat McCrory|
“We’ve got to get this done!”
The Governor says that this will help us create the financing needed to attract more entrepreneurs to start businesses here, rather than the North East or West Coast.
The Governor was referring to Senate Bill S481, the NC PACES Act, which was passed unanimously by the Senate Judiciary Committee yesterday. It now moves on to the Finance Committee. This bill is supported by Commerce Secretary Skvarla and the startup community. It enables a new way to finance startups and small businesses using debt or equity known as investment crowdfunding.
Read more about the Governor's comments at Triangle Business Journal here:
The North Carolina model allows startups and small business to raise capital as debt or equity, but with a couple of new ideas allowed by the exemption. Some key features of the exemption:
- The exemption allows accredited or non-accredited North Carolina resident investors to invest in equity or debt offerings from a North Carolina company provided the disclosure, reporting, registration, and limits described in the exemption are followed.
- A North Carolina company is allowed to promote the offering to North Carolina residents via the web or any other method provided the disclosure, reporting, registration, and limits described in the exemption are followed.
- A North Carolina company may raise up to $1M with non-reviewed financials, or up the $2M with reviewed or audited financials.
- Accredited North Carolina investors may invest any amount up to the offering limit, and non-accredited North Carolina investors may invest up to $5,000 annually per issuing company.
This is a financial investment model that is well understood by the start-up investment and small business services community. The NC PACES Act is also compatible with crowdfunding initiatives at the Federal level and with those being implemented in other states. Please see the FAQs for additional information about the bill. You can also see the text of the bill and follow the progress of S481.
Please contact your State Senator and express your support for S481, the NC PACES Act investment crowdfunding exemption.