Yakima County Development Association - Washington State Enters Crowdfunding Arena

Jean Brown

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Jean Brown

Jean publishes a blog called the Enterprise Corner.  It features articles on entrepreneurship, local industry trends, manufacturing news and periodic ‘toolbox’ articles showcasing assistance, incentives and other resources for local businesses.

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Washington State Enters Crowdfunding Arena

Washington State Enters Crowdfunding Arena

October 21, 2014

Washington State is on the verge of being in the crowdfunding business.  The state legislature passed HB 2023 last spring.  The legislation allows state businesses to raise up to $1 million during any 12 month period from Washington state residents in a crowdfunding campaign.  More recently the State’s Securities Division finished promulgated rules for the state’s crowdfunding legislation.  The rules are:

  • Allow businesses to file a simplified offering document designed to provide adequate disclosure to potential investors;
  • Limit investor contributions towards emerging businesses.  For investors with incomes under $100,000, the maximum individual investment is the lesser of $2000 or 5% of annual income.  For investors with incomes over $100,000 the maximum individual investment is the lesser of $100,000 or 10% of annual income. 
  • Allow ports and economic development councils (like New Vision) to operate crowdfunding portals under certain guidelines.

Washington’s new legislation expands the access for ventures and businesses wanting to use crowdfunding.  The State Department of Financial Institution’s Securities Division will administer crowdfunding activities and the program will officially start on November 1st.

Until recently, there was only one type of crowdfunding – the donation model.  It primarily focuses on creative ventures or causes.  Entrepreneurs, artists, and others with an idea can cast it out through crowdfunding sites and solicit funding.  Donors usually get a perk such as a T-shirt or pre-released CD or other product in exchange for helping a good cause or a cool new venture.  Donors do not, however, get any stock or ownership in the company.

Lawmakers all over the country have been pushing to create crowdfunding programs like Washington’s.  This is partly due to the fact that federal crowdfunding rules have been moving forward like a glacier despite passage of the JOBS act several years ago.  With a great potential tool for funding businesses available states are not willing to wait for the train from Washington. 

Interested investors and businesses can contact Faith Anderson if they have questions about the program.  Here is the new registration form for businesses.

See our other related blog:

Crowding and Kicking: JOBS Act Provides New Funding Options for Entrepreneurs

 

Here are other website resources:

Financing options for Established Businesses

Financing Options for Startups



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"New Vision has been a great partner for our business as we continue to grow in Yakima County. They helped us finish another expan-sion project recently and have instrumentally helped us grow from 20 to 200 employees in Yakima County." - Doug Christie, Amtech Corporation