In April 2012 the President signed the US JOBS Act into law, and the SEC still has not finalized regulations that would allow companies to sell shares on crowdfunding platforms. Often overlooked amid speculation about when the SEC will conclude its rulemaking process: equity crowdfunding to nonaccredited investors is already legal under certain conditions in two states.
In March 2011, the KSC adopted the Invest Kansas Exemption (Kansas Crowdfunding Exemption), which lets companies register for Kansas crowdfunding to fundraise up to $1 million from non-accredited investors who are also average state residents. Within a few months, Georgia adopted a similar regulation.
Only 6 companies fundraised and claimed the exemption in more the first two years, according to the Director of Finance at the Office of the KSC. Therefore, in 2013, the state modified certain terms of the IKE, but the general model has remained: It allows businesses to raise up to $1 million from local resident investors without going through the overwhelming process of registering the securities with the Office of the KSC.
Including Kansas crowdfunding, almost 29 states allow equity-based crowdfunding, either through an exemption or updating existing blue sky laws. The SEC recently released Title IV Regulation A+ rules from the JOBS Act in March 2015. Assuming that these rules will then require 60 days to be published in the federal register and become law, it appears likely that the earliest date small businesses will be able to utilize these JOBS Act provisions to raise capital will be the Fall of 2015.
With Kansa crowdfunding already entrenched, this announcement comes nearly three years after the overwhelming bipartisan passage into law of the JOBS Act, a historic piece of legislation designed to help small businesses raise funds to launch and grow. The announcement is also a remarkable 700 days past the deadline the law itself contains mandating the date that the final crowdfunding rules were supposed be released by the SEC.