It was announced earlier this week that Kentucky’s representative Steve Rigg is filing new crowdfunding legislation in the hope that the alternative funding route will be permitted within the state. The General Assembly is expected to reconvene in January 2015.
Kentucky Representative, Steve Riggs stated:
“This form of investment, which enables entrepreneurs to tap into a pool of hundreds if not thousands of investors, has taken off in the last couple of years. Kickstarter is the most widely known effort, but we’re starting to see states localize this approach as well, which is making it easier for home-grown businesses to raise the money they need to get off the ground. I think its time for Kentucky to take part.”
The Kauffman Foundation Index recently reported that Kentucky has been the fifth best state for nurturing entrepreneurial activity over the past two years, with the State Entrepreneurial Index (SEI) highlighting Kentucky’s monumental achievement of jumping from a ranking of 49th all the way up to 4th.
The SEI, which was first published in 2008, combines 5 factors to calculate an overall state ranking; establishment growth, establishment growth per capita, business formation rates, patents per 1,000 people and income levels for non-farm proprietors.
The crowdfunding legislation is not the only initiative that Kentucky is attempting to implement and develop. The Kentucky Cabinet for Economic Development last year created the Office of Entrepreneurship to enhance assistance for small businesses. The Office also oversees the Kentucky Innovation Network, which consists of 13 offices throughout the state, offering extensive resources for small and new businesses. Assistance ranges from funding initiatives, marketing and sales assistance and many incentive programmes to encourage investment and growth.
The JOBS Act legalized retail crowdfunding back in 2012. But the SEC is yet to finalise a set of rules for equity crowdfunding and – until it does – an increasing number of US States are attempting to circumvent the regulatory body by implementing state-specific legislation.
