Crowdfunding has become a reality in Washington State. This is a great opportunity for startups and entrepreneurs to finally get the funding they need to move forward with the support of many small contributors. But there are still strict SEC and State rules that must be abided by. That’s where a solid strategy comes in.
Join us to hear first hand from the experts regarding the key decisions you need to make and strategies you need to adopt to Crowdfund your next venture. The evening will start with 1 hour of networking for entrepreneurs, investors, advisors and the startup community, followed by 90 minutes of discussion and Q and A.
- Representative Cyrus Habib, 48th Legislative District
- Burt Hamner, Founder and CEO Hydrobee
- Casey Dilloway, Co-Founder Community Sourced Capital
- Michael Luni Libes, Serial Entrepreneur and Founder Fledge Accelerator
- Stephen McDonald, Attorney, Ryan, Swanson and Cleveland PLLC
- Joe Wallin, Partner, Davis Wright Tremaine
Date: Wednesday, April 16th, 2014
Time: 5:30pm – 8pm
Where: WeWork South Lake Union, 500 Yale Avenue North, Seattle, 98109
The Washington State legislature has passed a crowdfunding bill, HB 2023. The Governor has yet to sign the bill, so it is not yet law. But hopefully it will be law soon.
If you are wondering what the new law will allow, I have put together the following summary for you.
- The bill would allow companies to raise up to $1M during any 12 month period.
- Companies could raise those funds from accredited or non-accredited investors.
- Companies would have to be organized or incorporated in Washington and doing business in Washington to use this law.
- Only Washington residents could invest (investors would have to provide evidence or certification of residency in the State of Washington at the time of purchase).
- The aggregate amount sold to any investor by one or more issuers during the 12-month period preceding the date of sale could not exceed:
- For investors with an annual income or net worth of less than $100,000, the greater of either (i) $2,000 or (ii) five percent (5%) of the investor’s annual income or net worth.
- For investors with an annual income or net worth of $100,000 or more, ten percent (10%) of the annual income or net worth of the investor, up to $100,000.
- Offerings would first have to be declared exempt by the Department of Financial Institutions before they could move forward.
- Companies would have to file with the DFI an escrow agreement providing that offering proceeds will be released only when the aggregate capital raised equals or exceeds a minimum target amount, as determined by the DFI.
- Companies would have to make ongoing disclosures to shareholders and the DFI for as long as securities sold using the crowdfunding exemption were outstanding.
- Companies could but would not be required to use a funding portal.
The bill would fill a void – at least for Washington entities and Washington residents – that federal law has not yet filled. As you may or may not be aware, the federal JOBS Act contains an equity crowdfunding provision, but the SEC has yet to finalize the regulations allowing crowdfunding. Let’s hope the Governor signs the bill!
Update: The Governor signed the bill yesterday, Friday, March 28. The next step is the Department of Financial Institutions will be working on rules.
Crowdfunding has injected between thousands to millions of dollars to businesses which were not considered “traditionally” fundable at the time they created their campaigns. Many founders of startups have seen this and asked themselves, “Is crowdfunding really a viable option?” We’ve created this event to help the startup community answer this question along with answering the most important, and often undiscussed, questions around crowdfunding.
Our panel will cover:
- How crowdfunding can help you start or build a business
- The 3 main types of crowdfunding & the differences between them
- Why you might want to choose one type of crowdfunding over another
- The JOBS Act and how it’s affecting funding now, and in the future
- Legalities around crowdfunding
- The benefits of crowdfunding
- The challenges of crowdfunding
- Universal strategies for creating a successful campaign
- And more!
Moderated by Serena Walker, Founder and CEO Athena Business Institute
Date: Monday, April 7th, 2014
Time: 6pm – 9pm
Cost: $20 Live / $20 Replay + Online Q&A / $30 Both!
Where: 1201 Third Avenue, Suite 2200, Seattle.