Benji Jones is a partner at the Smith Anderson law firm with extensive experience in representing companies in exempt and non-exempt securities offerings. Feel free to reach out directly to the author with questions or comments.
With the Federal Title III rules recently becoming effective, there is certainly a lot of excitement surrounding national level “retail” crowdfunding to non-accredited investors. That’s obviously great news for the industry, but it’s important to remember that the majority of the states currently have some form of “intrastate” retail crowdfunding laws already in effect; many of which offer significantly more favorable terms to issuers and investors than the federal rules. Moreover, the number of states passing these laws, and their use, continues to grow making them viable capital options for many companies.
State of the States and Title III:
You may not know it but currently thirty (30) states have enacted Intrastate crowdfunding exemptions (or have enacted amendments to their existing blue sky laws to permit some type of Intrastate crowdfunding) and another eight (8) states are in various stages of enacting/considering such legislation. Just like the highly anticipated Title III rules, each of the state laws allows for crowdfunding to non-accredited investors. That being said, the laws of each state are somewhat unique and a discussion of the nuances between the various state laws would literally take all day. Luckily for those that might be interested I maintain, what I believe to be, the definitive comparative matrix of current Intrastate crowdfunding laws.Read the complete post on Anthony's blog.