The Governor of Alabama Robert Bentley signed a intra-state crowdfunding exemption law in April earlier this year. The new law allowed established Alabama-based businesses to raise up to $1 million through equity crowdfunding, with investment amounts capped at $5,000 for non-accredited investors. The Alabama Securities Commission publicly supported the investment crowdfunding law and has recently been working to ensure that residents of the state are fully aware of equity crowdfunding procedures.
Alabama Securities Commission’s Ed Reed stated that the seminars received a good turn out and that entrepreneurs wanted to ensure that their questions were appropriately answered regarding the new crowdfunding laws.
Ed Reed stated:
“Since 2008, financing has dried up, traditional financing is real tight. So this gives another avenue of financing for that new idea for the new business that wants to get started.”
“There’s risk. But it’s a way that people can get involved in the businesses in the community, people that wouldn’t normally have the opportunity will have that opportunity and businesses that might not have another avenue of financing will have an opportunity to raise money.”
Laura Hall, a representative of Alabama, hosted a town hall meeting on Tuesday. She explained how thrilling it was to see state residents taking advantage of the seminars and learning more about the legislation:
“What is more important is that it’s in Alabama. That being said, whatever the business is, it would be Alabama grown, it would be Alabama dollars, Alabama citizen who would be responsible for it, so that’s the most important part for me.”
Whilst the bill was slowly making its way through the legislative process, Senate Pro Tem Del Marsh stated:
“Our number one goal as lawmakers is to improve Alabama’s private sector economy by enacting pro-growth policies and reducing unnecessary red tape. Senate Bill 44 represents a common sense, yet innovative approach to increasing capital for Alabama small businesses. I applaud Senator Orr and Director Borg for partnering on this legislation and was proud to see it pass the Senate with bipartisan support.”
Texas is set to join Alabama as the thirteenth state to allow equity crowdfunding in the States following some final clarifications later this month.