Nearly four months Colorado’s intrastate crowdfunding laws went into effect, the state now has its own equity crowdfunding platform exclusively for its residents. The platform, called Invest Local, was launched earlier this week and allows nearly all residents to invest up to $5,000 in private businesses within the state. Businesses can raise up to $1 million with the potential to increase that to $2 million if they submit audited financial statements.
The site has yet to post any deals, but is currently surveying entrepreneurs to determine if they’re ready to crowdfund. According to the site’s president, Karl Dakin, “We would be happy if there were one or 10 or 100 crowdfunding platforms out there. As far as we know there is not, which is why this hasn’t taken off in the state.”
The company will list intrastate offerings under Colorado’s Limited Offering statute and the Colorado Crowdfunding Act, but will eventually support federal 506c, Title III, and Reg A+ campaigns sometime next year.
Securities laws prohibit Invest Local from promoting individual crowdfunding campaigns, but the platform will be active in general efforts to encourage citizens of Colorado to ‘Invest in Colorado.’
In the company’s initial press release, Dakin stated, “The potential of investment crowdfunding in providing capital needed by Colorado small businesses is tremendous. There are an estimated 4.3 million non-accredited individuals and over 700,000 businesses that may now invest through crowdfunding. If each of these individuals and businesses were to invest only $1, they could fund five businesses up to the $1 million limit (unaudited financials) under the Colorado Crowdfunding Act. That’s $5 million new dollars invested in Colorado. If each of these same investors invest $100 each year - $1 each in 100 different Colorado businesses, that’s half a billion new dollars invested in Colorado – each year. The positive impact upon Colorado’s economy is immeasurable.”
Despite the fact that the platform will take on just about any business, Dakin made it clear that marijuana and nutraceutical businesses won’t be featured.