Thursday, October 8, 2015

North Carolina General Assembly Adjourns Without Considering the Crowdfunding Bill

Unfortunately, the NC JOBS/PACES Act investment crowdfunding exemption bill (S481) has once again failed to make it through the NC General Assembly. They adjourned without taking up the bill for discussion, and it languished in the Senate Finance Committee all year. This despite the fact the bill had the support of the Governor, the Lieutenant Governor, the NC Commerce Secretary, the NC Secretary of State and the Securities Division, and the startup and small business communities all over the state that would have benefited from this new form of financing.

As of May this year, 19 other states have already passed a similar exemption, and an additional 20 other states have one in process. States like Texas, Indiana, and others shown on the map are already successfully helping small businesses get started and grow using both debt and equity crowdfunding based on these exemptions. So this represents a huge missed opportunity for North Carolina to join the 21st century and wake up to what is happening in the financial industry. There was no opposition to the bill, and it didn't cost taxpayers a penny. The exemption was a grass roots effort to help solve the lack of financing that has tortured the small business community ever since the 2008 banking collapse. While investment crowdfunding will be working well in many other states, the small business and startup communities here will continue to suffer.

As one supporter said on hearing the news, "I think we need a new motto: first in flight, but last in crowdfunding!" Sad but true.

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