The two drafted bills aim at the same objective – making possible for local businesses to raise equity capital from all kind of investors via online portals – but differ in the form and in the groups that promote them.
The Small Business California would allow issuers to raise up to $1 million via crowdinvsting and retail investors to invest up to $5,000 or 10% of their net worth. The Local Securities Exemption Act, instead, would allow companies to raise $100,000 and non accredited investors to invest up to $100 per offering, unless the issuers provides basic offering and business information, in which case the caps go up to $500,000 and $1,000 respectively. The bill also introduces different requirements depending on the type of the issuing company. For example, Small Farms and Agricultural Land Trusts wpuld be able to raise up $2 million.
The two bills, so far, have also shared a common destiny: their first attempt of getting an approval by the relevant authorities died along the way. Now they are both trying it again and we will see if this time they will be more lucky.
Alois, JD (2015). California Crowdfunding Bill Takes Another Step Forward. Cowdfundinsider.
Alois, JD (2015).California Legislation for Equity Crowdfunding Climbs Sacramento Once Again. Crowdfundinsider.
About the author - Irene Tordera
Born and raised in Milan, Italy, Irene is an International Business graduate, with a strong interest for innovative ideas that can simplify our lives.
During her studies, she co-founded an online community for sportspeople and worked in marketing positions at Ogilvy & Mather Advertising and at the European Business Angel Network, in Brussels. She is a passionate blogger about crowdfunding and the startup ecosystem.