Before Texas intrastate crowdfunding became legal, only accredited investors were able to invest in startups and emerging businesses. Now any Texas investor can support a local Texas-grown business. Texans have always supported each other and now can offer non-accredited investors a chance to support any business within the borders of Texas.
The Texas State Securities Board in November 2014 released its own proposed crowdfunding rules for public comment. As with the proposals in other states, the Texas rules rely on the intrastate offering exemption set forth in Section 3(a)(11) of the Securities Act.
This exemption provides that any issue of securities offered only to investors residing within one state, where the issuer is a resident of the same state, is exempt from registration under the federal securities laws. Each state has its own intrastate offering regulations, and exemptions for crowdfunding proposals must generally fall under this exemption or they are preempted by federal securities laws.
The most flexible crowdfunding software platform available, CrowdForce allows investment offerings for non-accredited investors to post concurrently with allowing accredited investors to view and get involved with the same deals.
CrowdForce was the first into the white label crowdfunding software market to support intrastate portal owners, and helped customers launch platforms in Indiana, Texas and Alabama in early 2014.
The CrowdForce white label crowdfunding platform software makes it easy for portal owners to manage different types of investors, issuers, brokers and also has a very robust reporting system to manage accounting and audits. Everything you need to sponsor investment offerings for non-accredited Texas resident investors and accredited investors is included as part of the software. All that’s required is to plug in your Texas escrow accounts for specific deals, and plug in in your broker to handle all compliance.
Texas was quick out of the gate with its crowdfunding regulations based on the federal exemption in 2014, shortly after other early adopters of intrastate crowdfunding, such as Georgia, Michigan and Maine. Whatever the capital raises are targeted towards in Texas, it presents a huge opportunity to raise necessary capital for large development projects and capital raises for the many local companies located in Texas.
What’s next? That depends on how you want to get involved in the Texas Crowdfunding industry. Maybe you’ll want to launch your own Texas Crowdfunding Portal. Or if you’re an entrepreneur, business or startup, you might consider issuing a Private Equity Placement to raise money for your business under the new Texas Crowdfunding Exemption. Or become a savvy Texas Crowdfunding Investor and start shopping for new businesses investments.