Crowdfunding in Arizona State Representative Jeff Weninger

What Is Crowdfunding? The practice of funding a project or venture by raising many small amounts of money from a large number of people, typically via the Internet. Three Types of Projects donations investing for a potential future return on investment (ROI)ROI prepaying for a product or service. Crowdfunding sites are sometimes referred to as platforms or portals

Crowdfunding Sites Spot.us

Crowdfunding Stats 1,000 – Number of websites allow anyone with a video camera and catch sales pitch to conduct online pledge drives $10 billion – Amount internet users spend annually to help bring new ideas to life 22,250 – The number of ideas funded by Kickstarter in ,000 – Estimated number of jobs crowdfunding created in 2014 $65 billion – Estimated revenue crowdfunding added to the global economy in 2014 Stats gathered from the June 14, 2015 Dayton Daily News and written by Scott Steinberg, who also authored “The Crowdfunding Bible”.

2012 JOBS Act JOBS-Jumpstart Our Business Startups Aimed at promoting the funding of small businesses through the easing of several securities regulations. It is estimated that roughly 3% of Americans qualify as accredited investors. Net worth of $1 million or show income of $200K per year The JOBS Act allow unaccredited investors to participate where they previously could not.

Status of Crowdfunding Nationwide

Equity Crowdfunding in Arizona On April 1 st, Governor Doug Ducey signed H.B. 2591, Arizona’s crowdfunding bill, into law. The Arizona Small Business Association helped draft the bill. Crowdfunding went live in Arizona on July 3 rd Businesses may raise up to $2.5 million in capital Up to $1 million without audited financials Non-accredited investors may invest up to $10,000 in exchange for equity in that company

Equity Crowdfunding in Arizona Offering must declare the amount of time to raise Not to exceed 365 days. All cash is to be held in escrow until 80% of the target offering is met Arizona Corporation Commission will have oversight Will require a number of disclosures about the company All transactions must be conducted through an independent website Only Arizona companies and Arizona residents can participate

Why Equity Crowdfunding? Allows small businesses to raise needed capital to succeed without going to a lender. Promotes new business and economic development. More jobs in Arizona. Investors can invest at lower levels to mitigate risk.

Challenges Investor Exit Strategy Can only be offered through an independent website “New” investors Understanding the risks involved

WHAT ARE THE NEXT STEPS FOR CROWDFUNDING IN ARIZONA?