Will this prayer for crowdfunding from State Commerce Secretary John Skvarla finally be answered?
Skvarla recently told The Charlotte Observer:
“Let’s all get on our knees and pray that it happens. We need crowdfunding … the longer we wait, the more opportunities we are going to potentially miss.”
An answer may be at hand.
And Triangle investor Mark Easley – one of many advocates for the bill who have their own NC JOBS website website – is hopeful.
“Keeping our fingers crossed that the prayer will be answered!” he emailed The Skinny Thursday afternoon.
The logjam over the North Carolina state budget may be breaking up, and that could be the break supporters of crowdfunding have been seeking. Caught up in the debate over spending, a crowdfunding bill could get a boost when the Senate moves to take up economic development issues separately.
WRAL Capitol Bureau Chief Laura Leslie reports that “Senate leaders announced Wednesday they’re willing to remove several major policy items from their budget plan in order to restart stalled negotiations with the House.”
Among those is incentives.
Early Thursday morning, Republican leaders were expected to formally discuss their own version of economic development incentives, such as expansion of Job Development Investment Grants. Gov. Pat McCrory has been calling for a new incentives package. The House has its own ideas.
Caught in the “morass” of differences over total budget figures is crowdfunding, which has had strong bipartisan support.
WRAL’s Mark Binker told The Skinny a couple weeks back that the bill (NC PACES Act, Senate Bill S481) “is stuck in the overall economic development morass. [I] was told by Senate leaders a few weeks ago they thought they’d do it as a cheap and easy way to keep McCrory happy, but haven’t heard much about it lately.
“Frankly, I just think it’s a small blaze in a land of forest fires.”
To build off that forest fire analogy, backers of crowdfunding believe that opening up financing and investing in startups to the masses will ignite a blaze of new capital.
The Charlotte Observer reported recently that backers of the bill remain confidence and expect passage soon.
“We believe crowdfunding is a viable way to raise capital for businesses in North Carolina, and I think by the end of this session you will see some legislation that does it,” NC House Speaker Tim Moore told the newspaper.
Senator Tamara Barringer, R-Wake, added: “I don’t have any anxiety … It’s going through the usual legislative process.”
More crowdfunding dollars than venture capital?
The Jobs NC blog, which is published by backers of the PACES Act, point out that new data indicates crowdfunding is becoming an even more important source for startup capital.
“The amount of money raised by crowdfunding is expected to surpass the amounts invested by the VC industry by 2016. Crowdfunding is expected to raise $34B this year while the VCs are expected to invest $30B,” the bloggers wrote, citing a story at Forbes:
They reiterated their call for passage in North Carolina, citing the fact more than 20 other states already have passed similar legislation.
“The NC PACES Act investment crowdfunding exemption takes advantage of this trend by enabling any North Carolina resident to invest in a North Carolina business via equity or debt instruments, provided that the reporting, disclosure, registration, and limits described in the exemption are followed. This will provide a significant new source of small business and startup funding all across the state, at no cost to the tax payers. Across the nation, 21 states have already followed our original strategy and implemented an intrastate crowdfunding exemption. Another 18 including North Carolina are in the process of passing the exemption.”
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