Crowdfunding bill to be signed by Gov. Hickenlooper today

By: InnovatioNews Monday April 13, 2015 0 comments Tags: Denver, Colorado Capital Con, Karl Dakin, Crowdfunding, Gov. John Hickenloop, Sen. Michael Bennet, SEC, Rep. Pete Lee, Rep. Dan Pabon

DENVER -- Access to capital for Colorado businesses is expected to be significantly improved by Gov.John Hickenlooper’s signing of a new law today that authorizes sale of securities through crowdfunding within Colorado.Crowdfunding_logoUSE

HB 15 -1246 was introduced into the Colorado Legislature by Representatives Pete Lee and Dan Pabon earlier this year.

The bill provides for licensing of a new player in the Colorado capital industry – an intermediary – who may create a website or Internet platform – where securities (stock, debt instruments or royalties) of Colorado businesses may be sold to state residents. 

The business selling its securities may raise up to $2 million with submission of audited financials or up to $1 million without audited financials. There is no restriction on the business publicly promoting its fundraising effort.

In addition, an unlimited number of non-accredited investors may buy securities from the business (previously limited to 35 non-accredited investors in any single sale of securities). However, non-accredited investors are limited to $5,000 that they may invest in any single offering.

Karl Dakin, director of Colorado Capital Congress that advocated for the bill, said the action to authorize securities crowdfunding within Colorado was necessitated by the inability of the U.S. Securities and Exchange Commission to develop regulations for a federal crowdfunding law -- the JOBS Act -- which was championed by Colorado Senator Michal Bennet.

Dakin said securities crowdfunding promises to be a very important tool for small business seeking capital.  He said 97 percent of adult Colorado residents do not meet the income or wealth criteria to be ‘accredited investors’ (those having $1 million or more in assets).

“These individuals now have more options to invest in local businesses and support the local economy,” Dakin said. “It is anticipated that businesses will use the law to build customer loyalty programs by allowing them to invest where they buy products and services.”

Dakin said the Colorado Capital Congress is working to make Colorado businesses aware of this new option for raising capital and learning how to conduct a crowdfunding campaign. He said CCC will soon begin conducting its own crowdfunding campaign as a public demonstration. 

In addition, CCC is presenting educational workshops on how to raise money through crowdfunding at http://www.coloradocapitalcongress.com/events

Dakin said the Colorado Capital Congress PBC is a social enterprise structured as a public benefit corporation in Colorado. As an activist and advocate, it offers membership services in the conduct of educational programs, mentoring, networking, research, capital industry surveys, public demonstration projects, expansion of existing capital sources, establishment of new funds and programs and community support.

CCC operations will support business, entrepreneur, innovation, civic, charitable and economic development organizations across Colorado, Dakin said.

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InnovatioNews is an online news magazine spotlighting innovative companies, products and people in Colorado. Launched in June of 2012, the site is the recipient of multiple awards.