Measure applies popular crowdfunding structure to small businesses
(TRENTON) — The Assembly Financial Institutions and Insurance Committee has released legislation by Assemblyman Angel Fuentes (D-Camden/Gloucester) that allows small businesses to tap into the crowdfunding finance model by offering shares of businesses to investors. Bill A2073 exempts New Jersey businesses and investors from registering with the Bureau of Securities, allowing small amounts of capital to make big change.
“Crowdfunding puts individuals in direct contact with the projects they want to succeed,” said Assemblyman Fuentes. “Countless ventures have gained wild success through the power of the many. Enabling small companies to capitalize on this mechanism can change the way we do business on the local level.”
Until now, crowdfunding sites such as Indiegogo and Kickstarter have only offered perks or products in return for a donation for their projects. Businesses looking to utilize this resource by offering shares of their company to investors would have to register each individual contract – no matter how small – with the state Bureau of Securities.
With this legislation, companies will be able to offer shares of their companies for investments of $5,000 or less without having to register each of these transactions with the Bureau of Securities, up to $1 million. To comply with the Federal Jobs Act and the Securities Exchange Commissions, offerings will only be available to New Jersey residents and businesses registered in the state.
“People who want to spend $50 to help a small business venture should not be deterred by overly burdensome regulations,” added Assemblyman Fuentes.