The Senate has approved legislation sponsored by Assembly Republicans Parker Space and Alison Littell McHose to help new and expanding small businesses access funding.
A-2073/S-712, which passed the General Assembly in March, now moves to the Governor’s desk to await action. Under the measure, small businesses can utilize a process known as crowdfunding to find investors to provide capital. In crowdfunding, a start-up venture would publish information on its proposed business and invite potential small investors to offer capital. Once pledges for a project reach a predetermined threshold, the businesses would move forward.
“Crowdfunding is a new source in the funding toolbox for business. It is a valuable way for the community to invest in local technology breakthroughs,” said McHose, R – Sussex, Warren and Morris. “Difficulty accessing adequate capital is one of the biggest challenges entrepreneurs face.”
This legislation is a version of the federal Jumpstart Our Business Startups Act, commonly referred to as the JOBS Act. Parts of this law have yet to be implemented, leading to the introduction of the New Jersey version.
“This bill is an excellent way to develop a market for businesses while reducing the risk to investors,” said Space, R-Sussex, Warren and Morris. “This can help entrepreneurs open their own business, create jobs, and achieve their American Dream.”
State sponsored crowdfunding initiatives have proven successful in several states, including Georgia and Kansas.