WASHINGTON – U.S. Sen. Michael Bennet welcomed the recent news that the Securities and Exchange Commission had approved final rules for crowdfunding.
The long-awaited announcement came more than three years after Congress passed the Jumpstart Our Business Startups Act in 2012. The act allows businesses and startup companies to raise funds online and provide their online investors with an equity stake in the company. Rep. Scott Tipton, R-Cortez, was one of the co-sponsors of the Jobs Act in the House. Bennet, D-Colo., co-authored the Crowdfund Act in the Senate with Sen. Jeff Merkely, D-Ore., and Sen. Scott Brown, R-Mass.
Bennet said the SEC’s final crowdfunding rules would provide new opportunities for Colorado’s small businesses to grow and create new jobs.
“It can help these businesses raise the capital they need and provide new opportunities for individuals to make investments while ensuring them proper safeguards,” Bennet said. “As new technologies quickly evolve and advance, we must find new ways to build our innovation economy and support the nascent industries and businesses that will create jobs in the 21st century.”
In its 686-page ruling on Friday, the SEC laid out provisions allowing companies to raise up to $1 million annually from non-accredited investors through websites registered with the commission. Companies using crowdfunding websites are also required to provide disclosures to their investors.
While small-business advocates warmly greeted the ruling, many lawmakers across the country have already moved to implement crowdfunding rules. Twenty-three states, including Colorado, have their own rules allowing businesses to acquire funding online. Colorado’s crowdfunding law recently went into effect on Aug. 5.
Bennet’s district offices across Colorado have held workshops to better acclimate Colorado businesses with the new crowdfunding rules.
“Our office has held workshops around the state, including in Durango, to help small businesses and entrepreneurs learn about crowdfunding and to offer feedback during the SEC’s rulemaking process,” said Bennet spokesman Philip Clelland.
According to the SEC, the new federal crowdfunding rules will be effective 180 days after they are published in the Federal Register.
egraham@durangherald.com. Edward Graham is a student at American University in Washington, D.C., and an intern for The Durango Herald.