Crowdfunding: Latest Economic Development Tool for Counties

County economic development organizations are joining the crowdfunding wave. Crowdfunding is a way for a person or business to fund a project or venture collaboratively with like-minded individuals through the internet on sites such as Kickstarter. County economic development organizations are helping small businesses benefit from crowdfunding. As reported in NACo County News:

The Williamson County Partnership in Texas launched the WilCo Funding Portal in the Austin-Round Rock area in September, which the partnership calls the state’s only “hyper-local” crowdfunding website. It aggregates and promotes local crowdfunding opportunities and tracks the progress of their fundraising goals. The county, home to Dell computers, has a population of more than 422,000.

A mix of changes to federal laws, including the signing of the Jumpstart Our Business Startups (JOBS) Act, and state regulations has led to the ability for more local development organizations to take advantage of crowdfunding opportunities. As the article continues:

States that are developing their own crowdfunding regulations are doing so under the authority of SEC’s Rule 147 — exemption for intrastate offers and sales of securities — according to Faith Anderson, chief of registration in the securities division of Washington state’s Department of Financial Institutions. And the bar for investors is much lower.

Under state crowdfunding rules that take effect Nov. 1 in Washington, for example, an investor whose net worth or annual income is less than $100,000, excluding their primary residence, can invest up to $2,000 or 5 percent of their annual income or net worth. Companies must set a minimum target offering amount and deadline, which if not met, results in investors’ money being refunded.

Washington is one of at least 12 states that have taken advantage of the interstate exemption, the others being  Alabama, Colorado, Georgia, Idaho, Indiana, Kansas, Maine, Maryland, Michigan, Tennessee  and Wisconsin, according to Several others are in the process.

For more information read the full article in NACo County News.