North Carolina Secretary of State Elaine Marshall told the second day CED Tech Venture Conference lunch audience Wednesday that the state’s crowdfunding law has “all the required governmental stuff completed.”

The first company to take advantage of it will be announced soon, she said.

“Last year I told you we were about to embark on a modern topic, investment crowdfunding,” she said. “Consider it embarked.”

The NC PACES act provides access to capital for entrepreneurs and small businesses.

“Access to capital for small businesses can be a challenge. This allows new businesses or those wanting to expand to openly solicit main street investors,” Marshall said.

Passing the legislation was “truly a bipartisan effort unfortunately too rare in these harsh partisan times,” she added. “It sailed through the General Assembly. My department did all the required rule-making, hired staff to handle it and vetted it with many of you on its details.”

A new highway for fund raising

Is it a good option for raising funds or a wise choice for investors?

“We can’t answer those questions,” Marshall said. “Never forget that investments have risks and a fund-raising campaign may have mixed results.”

She noted that her office has been the NC cop on the beat for investor protection for many years. “In the investment business,” she said, “a certain percentage of people are up to no good. And startups have additional risk.”

More coverage: Crowdfunding 101

A three-part WRAL TechWire series on the NC legislation:

  • Getting started with NC law
  • How to find investors
  • Risks, rewards of investing

When you visit crowdfunding sites online, “it is like a new highway,” Marshall said. A new highway needs markings, speed limits and guard rails, “because bad weather happens.

On a highway, not all vehicles have the same high quality, not all drivers are equally proficient, and you wouldn’t want to take your family out on a Mad Max highway, so rules are necessary she said.

The first company to take advantage of the crowdfunding law has not quite completed the process, but will be announced soon, Marshall said.

“We have built a great highway for issuers and investors to travel and there is an easy way to find out more about it.

“Go to Sos.NC.gov to get more background and contact information for us.”