Editor’s note: Mark Easley has been advising startups in the Research Triangle Park area of North Carolina since 2000 after a 25 year technology career in engineering, marketing, and sales in Silicon Valley. Mark has experience in the semiconductor business and related software and development tool products. In addition to his startup advisor activities, he has been on the executive board of a Raleigh/Durham area angel investor group and is a member of the Council for Entrepreneurial Development.

RESEARCH TRIANGLE PARK, N.C. – The North Carolina JOBS Act enables a new way of funding startups and small business in our state known as investment crowdfunding.

The FAQs and other posts on www.jobsnc.blogspot.com provide details and analysis of what the bill does and how it will work. The legislation (H680) passed the NC House by an almost unheard of bipartisan vote of 103 to 1 last June, and is now pending in the NC Senate for the short session beginning May 14th. So if everything goes as expected, 2014 will be the year that intrastate investment crowdfunding will become a reality in North Carolina.

So what has changed since last year? Crowdfunding in general, and investment crowdfunding in particular have been growing very rapidly in the US and around the world. The biggest donation and rewards based site Kickstarter just announced that they surpassed $1B in pledges to crowdfunding campaigns hosted on their site. Entrepreneur Magazine calls the growth of crowdfunding ‘epic’ and says the crowdfunding economy has tripled in 3 years and was over $5.1B in 2013. They also expect crowdfunding to provide a $65B boost to the world wide economy in 2014.

In the UK, where investment crowdfunding has been legal for over 3 years, the investment site CrowdCube has announced their stats on their 3rd birthday:

“The platform has raised £19.9 million (around $33 million) for 103 businesses, which Crowdcube anticipates will add 1900 jobs over the next three years. Darren Westlake, the company’s cofounder and CEO also mentioned that the company grew by 562 percent on the year before, and it sees over 100 applications per month. The company has 60,000 registered members.”

And that is just one of the many investment crowdfunding platforms operating in the UK, other parts of Europe, and in Australia.

Here in the USA, there have been a number of important developments. A new report on intrastate crowdfunding by Crowdfund Beat shows that many states are following in the footsteps of Kansas and Georgia, who were the first to implement in-state investment crowdfunding exemptions by regulation, and North Carolina, where we were the first to introduce an exemption by legislation. As of today 4 states have intrastate crowdfunding exemptions in place, 5 states including North Carolina have legislation pending, and 5 more are in various stages of considering the idea. Another 26 states are waiting for the Federal JOBS Act regulations to be finalized before deciding on an intrastate strategy. Another 10 states have not yet acted.

Meanwhile, a particular type of crowdfinancing called Peer-to-Peer (P2P) lending, where people get personal loans from the crowd, has taken off like a rocket in 2013. And venture capitalists are making major investments in a variety of crowdfunding platforms around the nation, because they see this as a major growth industry in the financial sector coming down the road. A report by nowstreetjournal has more details on these trends.

And in the startup community, which is so important for North Carolina in both the technology and life sciences markets, a report in Entrepreneur Magazine says that crowdfunding is the fastest growing source of funding for startups. In addition, accredited investor crowdfunding sites like AngelList and FundersClub have proven how effective they can be in providing funding for high growth startups.

So what does all this mean to North Carolina? It means we can benefit from these trends by helping our small businesses and startups to participate. We can make it much easier for them to find funding. And that funding will help them grow and create jobs. The NC JOBS Act investment crowdfunding exemption will be an important part of making it happen.

Support the North Carolina JOBS Act

If you have not yet done so, now is the time to contact your state Senators with an email of your support for H680, the NC JOBS Act. It is very easy to do using the links we give below.

  • Find and contact your North Carolina State Legislators and express your support.
  • Tweet, email, or post a link to www.jobsnc.blogspot.com using #jobsnc #crowdfunding
  • Sign up for email updates on the blog
  • Follow on twitter @jobsnc2013
  • If you have any questions or comments, please email the JOBS NC Crowdfunding Team at jobsnc@nc.rr.com or contact Representative Murry’s office at murryla@ncleg.net.