Today, the Georgia startup community launched the first company in US history to issue equity through online crowdfunding to non-accredited investors. cMEcompete, an Atlanta-based startup that provides a social platform for endurance events, advertised its equity offering to potential investors on SterlingFunder, another Atlanta-based startup.
Until the federal government approved the JOBS Act (Jumpstart Our Business Startups Act) a year ago, securities placement was governed by the SEC Act of 1933. The JOBS Act removes some of the constraints imposed by the SEC Act of 1933, however putting it into action has been delayed by the SEC. Well, Georgia’s Secretary of State office gave Georgians a head start on the JOBS Act. In 2012, they approved The Invest Georgia Exemption, which amongst other features make it legal for non-accredited investors to make intrastate investments (Georgia resident investing in a Georgia company) through crowdfunding. So, now, if you are a Georgia resident and are interested in investing in startup companies based in Georgia, it’s a 5-minute process.
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How is this different from Kickstarter, Indiegogo and AngelList? Kickstarter and Indiegogo provide crowdsourcing of non-equity contributions and are focused on filmmakers, musicians and artists. AngelList operates close to SterlingFunder’s space, but still requires investors to be accredited and the actual transaction occurs through Second Market (not online).
These are exciting times for Georgia-based companies with state rule makers removing barriers for startups and encouraging investor participation through tax exemptions. Just as cMEcompete is removing the barriers for non-athletes to participate in endurance events, SterlingFunder is removing barriers for non-accredited investors to invest in startups they are interested in funding. See us compete!
So, what should you do? Go register with SterlingFunder. It’s free.
If you want to learn more about SterlingFunder and crowdsourcing in Georgia, Atlanta Tech Village is hosting a Meetup on May 15. We at ATDC and the Atlanta Startup Community are excited to have cMEcompete and SterlingFunder and their founders active participants in our communities.