Biz Committee OKs Crowdfunding in Colorado
Bill Will Boost Small Businesses and Let Coloradans Invest in a Company Online (March 12) – The House Business Affairs & Labor Committee unanimously approved a bill this afternoon by Reps. Pete Lee, D-Colorado Springs, and Dan Pabon, D-Denver, to help small businesses in Colorado raise capital and allow Coloradans to invest in exciting new companies through crowdfunding.
Websites like Kickstarter and Indiegogo allow regular people to donate to the creation of a product, but not invest in a company. HB15-1246 creates the framework for Coloradans to go online and invest in small businesses that are seeking capital to expand their companies. The bill requires that 80 percent of the money raised online must be spent in Colorado.
The bill has strong protections for investors, but by its very nature, investing always carries risk. Though there is no minimal investment requirement, only SEC-accredited investors may invest more than $5,000 and the Colorado Securities Commissioner has oversight over the program.
“Crowdfunding represents the democratization of venture capital and will let anyone invest in a new exciting company with the click of a mouse,” Rep. Lee said. “The number one obstacle small businesses face is access to capital and this will open a new funding source to Colorado businesses.”
“This allows Coloradans’ good ideas to become businesses opportunities for entrepreneurs and investors,” Rep. Pabon said. “It will bring our investing system into the 21st century and let anyone take advantage of Colorado’s improving economy.”
The bill now goes to the House floor.
ATTACHED: Headshots of Rep. Lee, D-Colorado Springs and Rep. Pabon, D-Denver
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