Last Friday, the Washington Senate passed an amended version of crowdfunding bill HB 2023. The bill passed through the Senate by a 46-2 vote. With only a few hours to spare on Friday afternoon, the Senate put the bill to a vote and it was passed by an overwhelming majority. What does this mean for small businesses in Washington? It means we’re one step closer to allowing small businesses to raise capital through crowdfunding, i.e. advertising your securities offering to the public and allowing the public to invest in your company for equity (a piece of the pie).

History of crowdfunding
Well before the passage of the JOBS Act on April 5, 2012, a group of entrepreneurs and investors began pushing the idea of…

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In a recent post on the inVigor Law Group blog, we discussed some of the early data about the use of Rule 506(C), which is a type of “crowdfunding” available to accredited investors. The data that was released by the SEC provided evidence that companies are using the new rule to raise funds, and the offerings utilizing Rule 506(c) are smaller than traditional private placements under Rule 506(b). What the numbers don’t convey is how accessible this new rule can be for small businesses.

What is Rule 506(c)?
For nearly a century, companies looking to raise investments under Rule 506 were not allowed to publicly advertise the securities offering to investors. Since the JOBS Act was passed, this has all changed. As…

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In a recent article on the inVigor Law Group blog, Kyle Hulten wrote about the definition of a security. “Security” is not just a fancy name for stock in a company. A security can be a variety of different things, including equity, debt, and other investment instruments. The definitions vary from state to state and the federal definition is far from clear. Because there isn’t a clear one size fits all definition of “security,” it makes issuing securities (or issuing something you may not believe is a security) a risky endeavor.

It’s important to learn what a security is because there are serious consequences for failing to comply with state and federal securities regulations. Just ask Bernie Madoff. If you’re ever…

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Recent data shows that the software industry accounted for more than one quarter, or $3.3 billion, of the investments (nearly $12.5 billion) made in the 1,046 funding deals during the third quarter in the U.S. According to Digimind, a competitive intelligence software firm, and data released by WhoGotFunded.com, the industrial and energy sectors came in second, receiving $1.9 billion, with an average of $16 million per deal.

Healthcare companies attracted $398 million across 54 deals, accounting for only three percent of the total investments. Consumer product and services companies raised $1.2 billion, which indicates investor confidence in the sector despite the slow (often stagnant) economic recovery.

These third quarter numbers are promising, as the data suggests that both investors and consumers are gaining…

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