House committee passes business-friendly crowdfunding bill

Legislation that would simplify business investments passed the House Banking and Insurance Committee Wednesday morning with unanimous support. The Kentucky Intrastate Crowdfunding Exemption Act, HB 76, sponsored by Rep. Steve Riggs, creates online crowdfunding investment opportunities in Kentucky. The legislation proposes the creation of an online platform for Kentucky entrepreneurs that will make it easier for people to invest in business ideas that look promising.  Riggs’ legislation would allow people to invest up to $10,000 while helping businesses raise up to $2 million. Crowdfunding is picking up steam in many states because it would make it easier for entrepreneurs to raise the capital needed to launch or expand their businesses. Tennessee has passed a crowdfunding law and Indiana just passed theirs in 2014.  The bill contains built in safeguards to protect potential investors from fraud or if a business plan falls through. The website Kickstarter is the most widely known effort, but states are beginning to pass crowdfunding bills to localize the approach help small businesses.  This bill would complement the federal JOBS Act, Title III. It also allows businesses to crowdfund without having to wait on the SEC’s rule-making process and other burdensome restrictions.