The first approved equity crowdfunding platform has opened in Texas.
MassVenture, a San Antonio- based startup, allows for Texas investor, both accredited and non-accredited, to invest in equity in state-based ventures. The platform recently gained approval from the Texas State Securities Board, which reviews and regulates crowdfunding portals.
MassVenture already has a pipeline of deals ready to go, including ventures from seasoned Texas real estate developers.
Nathan Roach, MassVenture Co-Founder and CEO, commented:
"This is unprecedented that all Texas investors, regardless of their financial status, can access direct ownership of local and community based investment. We are honored and excited to be Texas' first and only approved equity crowdfunding portal."
John Morgan, the Texas State Securities Board Commissioner, recently predicted that Texas will become a national leader in US crowdfunding investment. The new crowdfunding regulations allow Texas-based companies to raise up to $1 million per year, offerings must be carried out through a registered broker-dealer or a state approved portal. Crucially the new rules allow non-accredited investors to invest up to $5000 per offering, with no limits for accredited investors. The platform was key in getting the new Texas crowdfunding rules implemented.
"We believe equity crowdfunding will catalyze new and wider prosperity, entrepreneurship and job growth in Texas. With a population of more than 26 million, Texas is a massive market for companies wishing to raise capital through crowdfunding, and MassVenture serves as a great gateway for all Texans to participate in funding growth in their communities and the state at large.”
Amir Mirabi, who recently served as Governor Perry’s Director of Small Business, joined MassVenture as VP of Business Development. He explained:
"Capital sourcing, cost and readiness have long been challenges for growing Texas businesses. The new [crowdfunding] rules allow portals like MassVenture to level the playing field for skilled entrepreneurs seeking funds, and smart investors seeking returns."
Mirabi explained that MassVenture is aiming to deliver “a dynamic solution for new real estate projects with the ability for investors to quickly evaluate risk and return opportunity”.
Roach noted the potential of the platform to provide the State with new investment opportunities:
“Traditionally the domain of the wealthy, the recent changes in Texas law open the investment floodgates for all Texans - and that's a game-changer. Equity crowdfunding provides a clear and promising new path for capital access and investment in Texas ventures. As the first state-approved portal, we encourage all investors and entrepreneurs to engage in this new and exciting opportunity at their earliest convenience.”
Equity crowdfunding legislation in the US has been slow to develop. Currently in most States you have to be an accredited investor. The industry is waiting for Title III of the JOBS Act, which will open up the industry to non-accredited investors. When this Act is passed it should release a huge amount of capital to small and medium sized businesses and provide a boost to the US economy. With one crowdfunding portal operational in Texas we shall be waiting to see if other States follow suit.
Join AltFi for its third annual Alternative Income Forum, exploring closed-ended funds (investment trusts) specialising in generating an income using alternative assets such as specialist finance, P2P lending, direct lending, asset leasing and more. Hear from the leading investors and fund managers in this rapidly growing market.