Monday, October 19, 2015

NC Secretary of State Elaine Marshall Calls for Passage of the NC PACES Act Crowdfunding Bill in Next Session

North Carolina Secretary of State Elaine Marshall was the keynote speaker at the investment crowdfunding symposium held at Campbell Law School in Raleigh last Friday. Among her many duties, she is responsible for implementation and enforcement of all investment securities laws in the state through the Securities Division of the Department of State. A large and enthusiastic crowd of securities attorneys, entrepreneurs, and law school students listened as the Secretary gave a very interesting review of the NC PACES/JOBS Act investment crowdfunding bill, explained its many benefits, and discussed why it would be a very good exemption which would allow a new safe and fair method of funding for small businesses and startup businesses in our state. She went into detail on how the legislation provides a good balance between ease and cost of implementation for small businesses, while providing the appropriate investor safeguards. She made a strong case as to why we should give it another try in the 2016 session. As she stated in her opening remarks:

Secretary Elaine F. Marshall

"Thank You! Before I begin, let me just add my own welcome to all of you for attending this important symposium at my beloved Alma Mater!
As a Campbell Law alumna from “a few years ago” I enjoy seeing what a wonderful addition to the North Carolina legal landscape this School has become!
Ok! Now I have to confess something! When I made my plea many, many weeks ago to speak here today, I assumed I would be talking to you about North Carolina’s exciting, brand-new crowdfunding law!
So, imagine my surprise when the recent very long General Assembly session ended without crowdfunding legislation being passed into law!
Oops! False start, it has been like a track event where the runners are on the blocks, they are all set, the starters gun goes off, but in a split second the gun goes off again – a false start. We feel like that runner who must start over.
This means we need it to happen next legislative session.
Why? Because we do not have an investment-based, or equity, crowdfunding law in North Carolina right now.
We have donation-based crowd sourcing—which is the Kickstarter type thing where friends and supporters can donate small amounts to get a limited project funded.
Plus, because of federal law, certain North Carolina “accredited investors” can invest through crowdfunding.
Where does that leave everyone else?
Well, we could just do a “wait and see” to find out if there will be new laws coming out at the federal level that cover more people.
But that is not really a plan so much as it is a hope.
No, I think we need to look at trying for a state bill again next legislative session.
I believe it is doable. A lot of people have been working for several years now, including many North Carolina General Assembly members, to bring crowdfunding into law here.
We just need one more try in 2016 I think."

We would like to thank Secretary Marshall and her team for their continued support. You can read the complete text of her keynote address on the Secretary of State website at

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