Tuesday, April 14, 2015

NC PACES Act Passes First Committee Test

The NC PACES Act (S481) investment crowdfunding bill was brought up and passed by the NC Senate Judiciary Committee by a unanimous vote. The bill will now move on to the Senate Finance Committee. Chief sponsor Senator Tamara Barringer presented the bill to the committee.
Senator Tamara Barringer

"This is very important to small businesses and start-ups," Barringer told the committee. "This is a jobs act for North Carolina."

Read more at http://wraltechwire.com/crowd-funding-bill-clears-nc-senate-committee/14581917/

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.



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