The Maine crowdfunding bill that would give Maine businesses more options in the way they raise capital was passed in 2014. The bill would make it possible for Maine businesses to raise capital by selling small amounts of equity to individual investors in exchange for equity stake.
Businesses interested in participating in Maine crowdfunding would be required to register with the Maine Office of Securities and set a target amount to raise no more than $1 million. Also required is a deadline by which they would need to meet their fundraising goals. If unsuccessful in hitting a goal by the deadline, all investors up to that point would have their money returned. No individual investor would be allowed to invest more than $5,000.
Senator Justin Alfond sponsored the bill, which believes will support Maine businesses and make the state “a national leader in turning ideas into jobs.”
Jess Knox, the statewide innovation hub leader for Blackstone Accelerates Growth, which works to support entrepreneurship in the state, applauded the House’s approval of the bill.
“This is exactly the type of support that elected officials in Maine should focus on,” he wrote in an email. “This law could provide Maine’s entrepreneurs and micro-businesses a leg up toward success and growth over their competitors in other areas.”
Participating businesses will need to register with the Maine Office of Securities to set their funding goals and deadlines. Then, residents will be able to invest up to $5000 in equity from a single business in exchange for equity stake. Finally, the funding goal must be met within the deadline the listing company has set.
Maine has also initiated a short form registration which may be filed to help streamline the process. The Maine crowdfunding bill requires issuers to share filed income tax returns and certified financial statements.