RESEARCH TRIANGLE PARK – FundingStack from John Panaccione and Clem Seifert isn’t the only effort to simplify the crowdfunding process in North Carolina.
Mark Easley, a veteran investor and entrepreneur in North Carolina, is also a proponent of the new crowdfunding landscape. After the NC PACES Act was introduced in 2015 as Senate Bill 481, Easley was a major figure in lobbying the North Carolina General Assembly to pass the legislation as a cheaper and simpler alternative to the national crowdfunding exemption established in the JOBS Act.
Mark Easley
Easley is now hosting a series of seminars throughout North Carolina with the goal of showing companies how to pursue crowdfunding through the NC PACES Act. He has also developed a crowdfunding platform called Localstake NC along with an accompanying resource website, CrowdfundNC.com.
Though both LocalstakeNC and FundingStack may be working to achieve the same goals, their regulatory paths are significantly different.
LocalstakeNC is a registered broker-dealer approved by North Carolina regulators along with those of other states. On request for comment, Easley explained that it is regulated by the SEC and monitored and reported on by the Financial Industry Regulatory Authority, “just like the big broker/dealers like Schwab or Fidelity.”
His platform and other broker-dealers offer federal exemption securities like 506(B), 506(C), Regulation Crowdfunding or Reg A+ Online Public Offerings. “They can also sell securities based on intrastate exemptions like the NC PACES Act,” Easley added. “They can offer private listings (like 506(B) offerings for accredited investors) or public listings for other types of crowdfunding like Regulation Crowdfunding or the NC PACES exemption.”
Both LocalstakeNC and FundingStack offer services to help entrepreneurs raise money with the NC PACES Act exemption. “Companies can compare those services to see what works better for them,” Easley added. “If the company wants to use one of the federal exemptions, they can use Localstake NC to sell their securities.”
‘Go it alone’ option
In addition to these two options, companies could also pursue crowdfunding under the NC PACES Act more independently, according to the Secretary of State’s Office.
George Jeter, the department’s director of communications, notes that “issuers could also also elect to ‘go it alone’ and host their NC PACES offering on a platform on the internet that they build themselves.”
Entrepreneurs do not have to use LogicBay’s pathway to participate in crowdfunding through NC PACES. But, Jeter adds, “For some people, we are sure it will be a solid option they consider using.”
