JULY 8, 2015
Arizona’s crowdfunding bill becomes law
Key tool in turning an idea into a money-making business
PHOENIX – STATE CAPITOL – Have you had an idea for a business but weren’t able to raise the money to get it up and running? Thousands of Arizonans have these ideas, but they don’t have angel investors or venture capitalists to get them started. Now, a bill that became law on Friday gives those Arizonans a new option to raise funds, and turn their concept into a business. Crowdfunding has arrived in Arizona.
Crowdfunding has been used to raise money for charities or people in need. But private companies couldn’t go that route, instead having to find wealthy investors to jump start their business. Now, with HB 2591 becoming law, a company can raise up to $2.5 million in funding in one year. An individual choosing to invest in the company can provide up to $10,000.
“This is going to be a game changer for small business to get started and grow,” says co-sponsor of HB 2591 Senator David Farnsworth. “With capital being provided through crowdfunding, these little guys can flourish, creating jobs for Arizonans.”
HB 2591 passed unanimously in both chambers of the Legislature in March and was signed by the Governor on April 1. Sen. Farnsworth worked closely with co-sponsor Rep. Jeff Weninger and industry stakeholders to bring crowdfunding to the state.
In 2012, Congress passed a bill allowing crowdfunding, but the federal law hasn’t been implemented, because the U.S. Securities and Exchange Commission hasn’t written rules on how it will work.
“Now Arizona is moving forward on crowdfunding, along with many other states,” says Sen. Farnsworth. “There is no reason for us to wait while the federal government delays implementation. We have entrepreneurs ready to get started, and now they’ll be able to raise that seed money.”
