Guidelines Announced For New Crowdfunding Law
July 1, 2014 — A form of fundraising that gained popularity online is now legal for Indiana entrepreneurs.
Crowdfunding allows a large number of investors to donate relatively small amounts of money to help start or continue a project or company. The strategy has proven successful for filmmakers and musicians using social media to solicit contributions.
The Indiana General Assembly passed crowdfunding legislation last year which goes into effect today. To coincide with the new law, Indiana Secretary of State Connie Lawson, whose office oversees investment practices within the state, announced guidelines for Hoosiers looking to invest or raise funds through crowdfunding.
Indiana investors can contribute up to $5,000 per opportunity, and entrepreneurs can raise up to $2 million dollars from small investments.
In a press release announcing the guidelines, Lawson says “Crowdfunding creates a new way for Hoosier entrepreneurs and investors to invest in Indiana. Previously, entrepreneurs could only solicit funding from wealthy investors, limiting their ability to grow their business and preventing smaller investors from taking advantage of up and coming opportunities. Now, all Hoosiers will have a chance to invest in Indiana.”
Securities Commissioner Carol Mihalik reminds Hoosiers to be aware of the risks which accompany all investments, and always do research before investing. Mihalik says “As always, our efforts to fight fraud and impose consequences will continue regardless of the type of investment.”