Raising Equity for your business

Texas now allows crowdfunding

In early 2012, the President signed into law the JOBS (Jumpstart Our Business Startups) Act. This Act, when implemented in full would open up many many opportunities for equity financing for entrepreneurs. Millions of unaccredited investors would open up opportunities for financing so many wonderful business ideas that were currently going un-financed and thus die. The rule making process at SEC has taken longer than planned and expected. Meanwhile, various groups around the country worked and collaborated on creating a push for similar laws and rules to be implemented at the state level.

In November 2013, Wisconsin, followed by Michigan and Washington, became the first state to pass a bill, a state level JOBS Act. This opened up doors for entrepreneurs in those states to raise Equity financing for their business ventures. The trend picked up and now we are seeing that happening in more and more states. As of today, 15 States have already implemented the intra-state law to allow businesses to raise equity funding within their respective states. Many more states are aggressively working towards the same goal.

Equity funding landscape is finally changing in the USA for small businesses. In 2015, it is expected to happen at a very fast pace with States taking over control of this space and making it happen in their own states. If now SEC comes with federal rules it probably will build upon and add value to what has already been done by the States.

My most recent book How to Raise $1,000,000 for your business in Texas is dedicated to Texas where the law was implemented in November 2014 and the rules were implemented by Texas State Securities Board in February 2015. Much has been accomplished in Texas in the area of equity crowdfunding and now Texas is read for small etrepreneurs who need equity financing.

The strict regulatory challenges involved for any business to raise equity investments in the USA had been a concern for many entrepreneurs who had grand business ideas but not enough funds to launch those ideas. It was not easy to get the attention of VCs and Private Equity firms or Angel investors where so many ideas were chasing limited avenues to reach out to the equity funds available in the USA.

Welcome the new era of Crowdfunding. Now your neighbor, your friend, your relative, your classmate, your colleague and everybody else that you know, or don’t, can own a small share of your company.

With this new era comes a whole new set of challenges related to the responsibilities of the entrepreneurs to, first, present their business idea properly and, second, manage their ongoing relationship with their investors.

Get Ready for Crowdfunding – entrepreneurship may be changing in America – please be there.