The New Jersey senate has just passed a bill allowing equity crowdfunding within the state. The bill, named S-712/A-2073, eased through the senate 75-0 and now needs to be signed off by Governor Chris Christie. The legislation, first introduced in October 2013 by senator Joe Kyrillos, allows companies to raise up to $1,000,000 - with unaccredited investors limited to $5000 per project. Kyrillos commented:
"At a time when conventional sources of financing are scarce, this legislation will help New Jersey’s innovators seek private capital from the investing public to develop their products or services right here in our state,”
“Crowdfunding will level the playing field for future employers, giving those without access to Wall Street a chance to gain startup capital quickly and grow their business with the support of the community.”
The opportunity is only open to New Jersey residents. However, other states, such as Georgia, North Carolina, Kansas and Wisconsin, have passed similar legislation. On this point, Kyrillos remarked:
“Entrepreneurs in New Jersey deserve the same opportunities to thrive as innovators in other states who have turned several thousand dollars in online crowdfunding investments into thriving businesses with dozens of employees.”
Senator Kyrillos backed up the importance of the legislation by stating that 90% of New Jersey’s employers are smaller businesses – employing more than half of New Jersey’s private sector workforce.
“We grow jobs and opportunities for people here by eliminating opportunity-crushing regulations and antiquated roadblocks to ingenuity and economic revitalization principally driven by our state’s small businesses,
On top of this new legislation, all American citizens have the ability to fundraise and invest through the JOBS act, and AltFi has reported widely on the impact that this has had, as well as some of the areas that have been left relatively unaffected. This new legislation operates alongside the Act and provides an additional opportunity to access capital for entrepreneurs.
“Unaccredited investors have always been able to risk capital in the public markets and now they can as well in private companies, small businesses, and entrepreneurial start-ups,” Kyrillos concluded.