The Texas State Securities Board approved rules to make crowdfunding ventures more “equitable” for small investors in Texas by a 4-0 vote on Wednesday, October, 22, 2014. With the vote, the board approved restrictions designed to enable unaccredited investors to invest as much as $5,000 a year in startups without requiring proof of high-income levels — in exchange for equity. The equity crowdfunding rules are scheduled to go into effect in late November and enable approved online portals to list startups seeking investors, a board spokesman said.
As we noted in previous posts, several Texas companies and individuals have used crowdfunding to raise thousand of dollars. The new rule should expand the practice considerably. The state crowdfunding rules do not set an investment limit on accredited investors.
Since approval of the vote, The Texas State Securities Board has added a section to its website dealing with the new equity crowdfunding rules.The state body said Tuesday that the section includes the final text of the rules,information for Texas crowdfunding portals and information for issuers using the intrastate crowdfunding exemption. Also, the section includes forms for crowdfunding portal registration, withdrawal of registration, and the crowdfunding exemption notice.
In 2012, the Jumpstart Our Business Startups Act (JOBS Act) included crowdfunding rule changes in an attempt to spark innovation and revitalize the national economy during the recession. Individual states are requesting exemptions to the proposed federal rules and establishing their own guidelines.