RALEIGH – A new era in raising capital for startups across North Carolina is getting underway with a Raleigh startup formally launching a crowdfunding campaign as authorized by the NC Paces Act.
“Being the first is a tremendous opportunity for us,” says Scott Hanson, the president and a co-founder of Hush Buddy, which is a patented sleep training system for toddlers. “[We are] making N.C. business history.”
Hanson and his team worked with Mark Easley, a serial investor who lobbied long and hard to help push crowdfunding legislation through the NC General Assembly. Easley teamed with a company focusing on crowdfunding called LocalStake to launch LocalStakeNC.com last December, and they helped secure state approval for the Hush Buddy funder. LocalStakeNC is a registered Broker/Dealer in North Carolina.
Crowdfunding enables people to make investments without
“It’s business history in the making,” Easley tells WRAL TechWire.
“An innovative start up is the first company in North Carolina to find investors—not through PowerPoint and pitches, but though investment crowdfunding, thanks to the state’s new NC PACES Act.”
Hush Buddy is looking to raise $100,000.
Crowdfunding, which is regulated overall by the Securities Exchange Commission, is growing in popularity among entrepreneurs who find it as an alternative to venture capital investing. People do not have to be accredited investors in order to participate in crowdfunding campaigns.
An accredited investor generally is a high net-worth individual or someone who has grossed more than $250,000 in income over the past two years, notes Wikipedia.
High stakes – up to$850,000
LocalStake has already helped a variety of startups raise money in Wisconsin, Michigan, Indiana and Colorado with one firm raising $850,000. Several others raised $300,000 or more.
PACES stands for the North Carolina Providing Access to Capital for Entrepreneurs and Small Business Act, which was approved in 2016 and rules for which were OK’d by the state’s Securities Division in April of 2017.
“We think this is a win-win-win for North Carolina startups, everyday investors, and the state itself,” Easley points out.
On Monday, after the state issued a “compliance letter,” the Hush Buddy offering went live online.
“Thanks to NC PACES Act, any resident of North Carolina can now get in on the ground floor as an investor in Hush Buddy with as little as $500,” Easley points out.
“It’s easy to do,” he explains, by setting up “a free online investor account at Localstake NC.”
Easley and others labored for five years to bring crowdfunding to North Carolina.
“Investment crowdfunding has been growing significantly around the nation, with billions of dollars raised across many different platforms,” Easley wrote in a recent blog post.
“Now it’s our turn North Carolina! It’s time to start investment crowdfunding our most promising North Carolina startups and small businesses to help grow the economy, create jobs, and enable new products and services in communities all over our state.”