Big News For Startups As Florida Green Light’s First Crowdfunding For Equity Company
Five years ago, Eric Cantor (R-VA) introduced the Jumpstart Our Business Startups Act. This was a re-working of The Reopening American Capital Markets to Emerging Growth Companies Act. The JOBS act was passed in that same legislative session. Last year the Title III equity crowdfunding rules went into effect.
Slowly but surely, states have followed along with their own acts. On October 1st 2015, Florida’s “Intrastate Crowdfunding” law went into effect. Through their law, Florida residents can invest utilizing crowdfunding for equity through an intermediary, like a funding portal website or licensed broker dealer.
TruCrowd, a crowdfunding for equity company based in Chicago, has opened TruCrowd of Florida. On March 24, 2017 TruCrowd was approved by the state of Florida Office of Financial Regulation to be the first funding portal website as an intermediary.
This allows Florida startups to raise up to $1,000,000 over a 12 month period through the portal. The companies must file with the FOFR and disclose information to investors and the intermediary facilitating the offering, including: description of the business and the use of proceeds, information about officers and directors, the price of the offered securities, the target offering amount, the deadline to reach the target amount and, depending on the amount to be raised, reviewed or audited financial reports. Any Florida resident is allowed to invest over a 12-month period up to the greater of $2,000 or 5% of income if less than $100,000 and 10% otherwise (up to $100,000). Securities offerings which comply with Florida Statute 517.0611 are exempt from Federal SEC crowdfunding regulations.
“Under Florida Intrastate rules, Funding Portals will play a major role for Main Street start-up entrepreneurs who seek seed funds from their immediate community and don’t want or need all the ancillary services (or added costs) of a broker-dealer” says Vincent Petrescu, President of TruCrowd Florida, Inc and TruCrowd Inc., (US HQ in Chicago). “TruCrowd Florida represents a viable alternative from Broker-Dealers for these small businesses particularly with their back-end deal room technology and controls over protecting sensitive data” says Charles Radley, Florida Territory Manager for TruCrowd Florida, Inc.
TruCrowd Florida has several features built to protect the intellectual property of startups (ID-verified Investors, Data Room) while decreasing both the risk of fraud (Twitter-like Q&A, Regulatory Checks) and the risk associated with startup investing (The Bonus feature, IRA).
In addition to the new Florida program, partner company TruCrowd Inc., in Chicago, continues to offer their Federal Crowdfunding program for companies and investors anywhere in the USA, on terms very similar to the Florida Intrastate program. Florida companies and investors can enjoy the best of both worlds by participating in both the Intrastate and Federal equity crowdfunding programs.
Interested in crowdfunding your Florida startup in Florida? Check out TruCrowd here.