Skip to main content

The Big Dog Weighs In...California House Passes Equity Crowdfunding Bill

Image
By
According to an analysis if the proposed law, "this bill is closely modeled after the recent enacted equity crowdfunding exemption established in Maine..and will allow small businesses to raise up to $1 million in capital by selling small amounts of equity to individual investors. Small businesses will need to register with the California Department of Business Oversight, as well as, set a fundraising goal and deadline. This bill will allow individual investors to purchase up to $5,000 in equity from a single business."
Bill AB-2096 Highlights (click on the link at left to go to the bill)
"A) The aggregate amount of securities sold to all investors by the issuer within any 12-month period is not more than one million dollars ($1,000,000).
(B) The aggregate amount of securities sold to any investor by the issuer, including any amount sold during the 12-month period preceding the date of the transaction, (is) five thousand dollars ($5,000)...
(ii) For..offering amounts of one hundred thousand dollars ($100,000) or less,..the issuer must file:
(I) Income tax returns for the most recent year...
(II) Financial statements..certified..by the CEO to be true and complete.
(iii) For offerings of more than one hundred thousand dollars ($100,000), but not more than five hundred thousand dollars ($500,000), financial statements reviewed by a public accountant who is independent of the issuer..
(iv) For offerings of more than five hundred thousand dollars ($500,000), audited financial statements.
(E) The issuer must have a separate bank account for all funds raised as part of the offering to be held until the time that the minimum offering amount is reached. If the minimum offering amount is not reached within one year of the effective date of the offering, the issuer shall return all funds to investors."
One thing to note: "the U.S. Treasury just gave the California State Treasurer $55,218,250 in federal funds from the JOBS Act to provide access to capital to small businesses through the California Pollution Control Financing Authority and the California Infrastructure and Economic Development Bank. This is the second of three disbursements."
Labels:

Comments

Post a Comment

Popular posts from this blog

Crowdfunding Accounting 101 - Revenue Recognition in Crowdfunding

By
A start-up using crowd funding to create a product is different from a normal company. The start-up has cash inflows from donations but does not have a product, yet. In this situation, we recommend using completed-contract method to recognize revenue. Under this way of thinking, we assume the start-up is akin to a project or a long-term contract. The crowdfunding company will find it difficult to estimate the revenue from crowdfunders and, hence, the cost of rewards or perks. Under International Financial Reporting Standards (IFRS) and GAAP guidelines, if the firm cannot reliably measure the outcome of the project, revenue should be recognized based on contract costs. These costs should be expensed when incurred. Profit is recognized only at the completion of the project. In summary, for crowdfunding companies, revenue, expense, and profit are recognized only when the crowdfunded product is actually manufactured. 1 For example, assume that AAA Corp. wants to manufacture bicyc...
Post a Comment
Read more

Crowdfunding heads to Georgetown

By
So first Fundrise raises $31Million for real estate crowdfunding.  Now Realty Mogul, a real estate crowdfunding platform, responds quickly with a rare opportunity to be a part of a $31.8 million project in the exclusive Georgetown neighborhood of Washington DC. #crowdfundrealestate Realty Mogul, along with   JOSS Realty Partners ( "JOSS" ) , is introducing the Georgetown Plaza to the crowdfunding world. This 150,097 square foot   Class B office building is  located on Wisconsin Avenue, Washington DC's major north-south artery and half a mile north of Georgetown University's main campus and Georgetown University Hospital. The primary objective of this investment crowdfunding campaign is to acquire, lease-up, and reposition the office building before reselling. In this crowdfunding transaction, Realty Mogul investors will hold a partnership equity stake in Realty Mogul 19, LLC.   Realty Mogul 19, LLC will subsequently invest in 2233 Wisconsin NY Me...
Post a Comment
Read more

Equity Crowdfunding in the District of Columbia 7/22 at 6:30 pm

By
Equity Crowdfunding in the District of Columbia According to recent news reports, "D.C. regulators are drawing up a proposed framework that would allow District startups to take advantage of equity crowdfunding from District investors, following a growing number of states which have passed similar measures in recent months. D.C.'s Department of Insurance, Securities and Banking (DISB) is preparing to publish a proposed rule that would give companies within the city “an alternative to existing methods of raising capital,” the agency said in a statement to the Washington Business Journal. That proposal, according to DISB, “is similar to those that are being developed in other states and the SEC’s proposed crowdfunding regulations.” We will describe state-level equity based crowdfunding, discuss specific crowdfunding campaigns and announce a new initiative. https://equitycrowdfundingdc.eventbrite.com
Post a Comment
Read more