New Jersey is the latest state to pass an intrastate crowdfunding exemptions bill that allows non-accredited residents to invest in businesses within the state. The bill was recently passed by the Assembly and is now awaiting Governor Chris Christie’s signature to become law. The original version of the bill was introduced by senators Joe Kyrillos and Ray Lesniak in 2013 at the time when crowdfunding was still new to many people. The bill allows entrepreneurs from New Jersey to raise private capital of up to $1 million from non-accredited residents within the state. It also allows the state residents to invest up to $5,000 in various crowdfunding ventures.
Crowdfunding will also level the investment playing field by giving everyone an opportunity to raise startup capital more easily and quickly
According to Kyrillos, conventional sources of capital have continued being scarce and inaccessible to many local entrepreneurs. In this regard, the legislation is going to enable most of the entrepreneurs to raise private capital from the public and be able to finance their businesses in their own state. Crowdfunding will also level the investment playing field by giving everyone an opportunity to raise startup capital more easily and quickly. This will facilitate development of businesses by the community and for the community because the investors and entrepreneurs will be from within the state.
Many states in the U.S. have enacted their own intrastate crowdfunding regulations in line with Title III of the Jumpstart Our Business Startups (JOBS) Act to allow residents to invest in projects and firms through crowdfunding. Currently, 24 states have already enacted their intrastate crowdfunding exemptions and 15 other states are at various stages of approving their regulations.
…if the bill becomes law, these investors will be able to diversify their risks and investments across both the public and private platforms
Small businesses make up 90 percent of the employers in New Jersey and create more than half of the private sector workforce in the state. For many years, retail investors in New Jersey have been risking their capital in public markets, but if the bill becomes law, these investors will be able to diversify their risks and investments across both the public and private platforms.
Entrepreneurs in other states that have established intrastate crowdfunding exemptions have raised thousands of dollars through online crowdfunding. This facilitated the birth and expansion of thriving businesses, thereby creating employment for many local residents. The passing of this law will also give New Jersey entrepreneurs the same opportunities.