Small businesses in Washington state may find it easier to obtain the funding they need to move ideas and projects forward, thanks to new legislation that expands on the state’s crowdfunding law and increases access to capital for small business.
Gov. Jay Inslee recently signed Rep. Brandon Vick’s HB 1593, which goes into effect July 22. Remarkably succinct – only four pages long – the bill enjoyed bipartisan support, with zero nay votes in the House or Senate. The bill is aimed at “small securities offerings” (aka crowdfunding), whereby businesses fund a project or venture by raising monetary contributions from a large number of people, typically via the internet.
Changes that the bill introduces include reducing the frequency of having to file a business’s executive salary information from quarterly to annually; removing the investment limitations of accredited investors; and extending the allowable types of funding to include convertible debt and any type of equity funding.
According to popular crowdfunding site Kickstarter, businesses around the world have raised a total of more than $3 billion for 123,631 projects, with nearly 13 million backers. Even with the “old” rules, many local businesses have used crowdfunding to bankroll their projects. Examples include Bluer Denim (founded by Jeff Shafer, who also is the founder of Ridgefield-based Agave Denim), OurBar and Doomsday Brewing in Washougal, and the Kiggins Theatre and manufacturer ProtoPlant, Inc. in Vancouver. More recently, VBJ Business Growth Award winner Plum Geek Robotics raised nearly $400,000 in the last two years.
Rep. Vick (R-Felida) hopes the bill will extend this type of success to more Washington businesses (including those incorporated in other states), benefitting businesses but still…