Senator Leticia Van De Putte recommends crowdfunding research to Lt. Governor
October 10, 2013 by Roberto Rondero de Mosier
Recently my co-founder and I were thrilled to find out that some advocacy work we have been doing at the Texas state capitol had paid off. This past summer, after the close of the 83rd Texas Legislative session, we met with staffers in different Senate and Congressional office in Austin, Texas to explain to the them the idea that Texas should lead the way in implementing entrepreneur and fund raising friendly intrastate private securities offering through registered intermediaries.
What does that convoluted language mean? Well essentially, we proposed that the rules the SEC is writing to implement the JOBS Act of 2012 are too limiting. While it is a great first step to allow for crowd funding portals to allow non-accredited (98% of Americans) investors to easily participate in private equity investment opportunities, there are still pretty strict limitations. There is an annual cap on investors and the limit on money that can be raised through non-accrdited investors is set at $1,000,000. So the power of the crowd is in fact, limited.
But, that does not have to be the case in Texas. Texas has always touted itself as a very business friendly state. We care about our citizens and entrepreneurs and have a great track record of stimulating job growth. To that end, Texas can crate its own rules for equity crowd funding for Texas based companies to be invested in by Texans. Think of it as investment in Texas for Texans. This is what intrastate crowd funding rules in Texas could facilitate. A higher cap on investment? Sure. Less barriers to entry for investors? Why not? Thanks to the receptiveness of people at the Capitol, at least one Senator has heard us, Senator Van De Putte, who released her recommended interim charge: “Study the costs and benefits of implementing an intrastate equity crowd funding system for the potential growth of small businesses in Texas. Examine the current federal regulatory framework and other state’s laws.” You can read her full list of recommendation here. To this we say, “thank you Senator!”