Delaware legalizes online crowdfunding for businesses
Delaware start-ups and small businesses will soon be able to raise money from small investors over the internet.
On Monday, Gov. Jack Markell (D) signed a bill allowing people to invest up to $5,000 in a single business before going public.
Sen. Brian Bushweller (D-Dover), one of the main sponsors of the bill, says the move will help equalize that opportunity and also give every day people a closer connection to local businesses.
“They may have mutual funds, but they’re not directly participating in the ownership. They may have pension funds and so forth, but as actual shareholders, in my view, there’s far too few people,” Bushweller said.
Rep. Bryon Short (D-Brandywine Hundred), who backed the bill in the House, agreed.
He says it’s a great way for neighbors to help grow the state’s economy.
“It really brings in the Delaware citizenry so they can have that marriage to our economy in a very personal way,” Short said.
Start-ups can only raise $1 million each year from smaller investors under the new regulations.
Only state residents can invest in Delaware companies, with the state Department of Justice overseeing investments.
These new regulations will go into effect in November.