That’s the new SEC rule that facilitates intrastate crowdfunding offerings. How so?
Well, until now there’s been a ban on intrastate advertising for new offerings, which dates back to snake oil days. The modern interpretation of this ban meant that would-be crowdfunders have not been able to use social media posts, email, or other communication that could not be ensured to stay within state lines. Kind of a big limitation when you’re trying to get the word out about your small business or startup.
Lots of restrictions still remain, including geographic restrictions on actual security sales – but this is one more piece of the puzzle that will allow for easier and more democratic capital access in years to come. Watch this space!
Over the last few years, I have been trying to bring my investing closer to home, in part by investing in local businesses. Why did I need exposure to the Malaysian bond market? Truth be told, I did not. I do not.
But let me tell you, making this shift is easier said than done – investing locally remains a very labor-intensive process, and while the relationship-building part is terrific, the paperwork intensity is unappealing for many business owners and investors alike. The rising clarity and simplicity for crowdfunding processes that’s underway will help to make local investing easier.
A handy summary of this new rule can be found on the Locavesting site, which has lots of other crowdfunding info as well. And the official SEC fact sheet about the rule has lots of additional detail, as you might expect.