Business

Small Business and Entrepreneur Equity Crowdfunding Act Passed

Gov. Gavin Newsom  Oct. 12, signed Assemblymember Al Muratsuchi’s (D-Torrance) AB 511, the California Small Business Equity Crowdfunding Act. 

The new law will help entrepreneurs and start-up small businesses use federally approved crowdfunding portals to find investors who can provide early-stage seed capital offerings to help jumpstart companies and help them become candidates for larger rounds of financing. AB 511 also provides greater consumer protections to investors participating in equity crowdfunding financing. 

This bill was sponsored by Small Business California and supported by the California Chamber of Commerce, National Federation of Independent Business, National Association of Women Business Owners and many other small business advocacy organizations.

Congress enacted in 2012 the Jumpstart Our Business Startups Act (JOBS Act) which modernized regulations for raising equity capital by establishing crowdfunding provisions. The JOBS Act has facilitated capital access by larger later-stage enterprises, but it hasn’t been effective in providing small businesses with access to critical capital at the seed level. 

AB 511 creates an exemption from state securities qualification to enable a business in California to conduct an offering pursuant to SEC Regulation Crowdfunding without the requirement to provide reviewed financial statements for seed offerings of up to $300,000. AB 511 also provides investor protections not present in the JOBS Act such as an attorney’s fees and costs provision for prevailing investors and a prohibition against class action waivers.

Reporters Desk

Recent Posts

Trump Drops the Hammer on Farmworkers

In addition, the new regulation allows growers to charge H-2A workers for housing, which they…

5 days ago

Letters to the Editor: Toberman Seniors Rebuild Reputation, School Library Proposal, and Praise for “Art, Authenticity vs. Hypocrisy”

  Toberman Seniors Club Seeks to Restore Its Good Name Amid Unexplained Changes We, the…

5 days ago

Becoming Daddy AF, Through Dance and Storytelling

At 65 years of age, Roussève stands, through his diagnosis, still performing, writing, creating and…

5 days ago

Icon versus Caricature

The difference between being a true icon and a caricature is in the authenticity of…

5 days ago

Justice Ketanji Brown Jackson to Lecture at CSUDH

Jackson will appear as a visiting lecturer at California State University, Dominguez Hills, this fall…

5 days ago

Harbor Area ICE Watch

Today, a federal force again disappearing our neighbors, using our community as its base of…

5 days ago