A bill unanimously passed through the Virginia House and Senate February 2015 that would make it easier for Virginia businesses to use Virginia crowdfunding to raise money for their startup companies.
Crowdfunding, commonly practiced by entrepreneurs, allows early stage businesses to raise small amounts of money from multiple people.
Through Virginia crowdfunding, businesses can now raise capital from unaccredited investors in exchange for equity in the company.
House Bill 1360, introduced by Del. Scott Taylor, R-Virginia Beach, creates an exemption for some requirements of the Securities Act for businesses in Virginia raising money from investors in the commonwealth, allowing businesses to raise up to $10,000 from an unaccredited investor.
Crowdfunding is a recent innovation to help entrepreneurs get their companies off the ground and find the capital to grow. The Virginia crowdfunding bill would eliminate many of the regulatory stumbling blocks for a business looking to take advantage of the opportunity to solicit investments by crowdfunding.
The bill is expected to be signed into law by Gov. Terry McAuliffe, Virginia for-profit companies would be allowed to raise up to $2 million per year.
The Virginia crowdfunding legislation is a win-win for Virginia small businesses and investors. It gives businesses yet another tool to raise startup money and provides established small business owners another financing option to expand and gives investors in Virginia another incentive to help more new and small businesses succeed in the commonwealth.
Review the current Virginia Crowdfunding Exemption:
Here are just a few features for Virginia crowdfunding included in the CrowdForce platform software:
• State residency self-verification
• Driver’s license upload for verification
• Setting funding limits for non-accredited investors
• Allowing accredited investor participation
• Complete and simple document signing and management
• Integrated ACH payments
• Plug in your state escrow account
• Plugin in your broker services for accredited investments
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