Investment crowd funding bill moves closer to reality in N.C.

Brian Dally created a website where independent real estate developers raise money from investors. Now Dally wants to expand his business but he will to have to wait until N.C. legislators sign the appropriate legislation.

The U.S. Congress has implemented six of seven new titles for crowd funding. The non-implemented title changes a current rule, namely that when you want to participate in private- equity placement, no one must be an accredited investor. The SEC has not yet enacted this title.

Frustrated by “red tape”, many states began drafting their own legislation, and today seven states have intrastate crowd funding exemptions in place. The N.C. JOBS Act exemptions are twofold: Small businesses can raise money via the internet, and they can do so from non-credit investors.

Benjamin Baldwin, an attorney who has written for several North Carolina business and law publications on the JOBS Act, said one of the biggest drawbacks is that the law will require a company to produce audited financial statements if it's trying to raise more than $ 500,000 – a cumbersome and expensive process. Another drawback is that fake crowd funding campaign could be set up to try swindle money from investors. But, measures are taken to protect against this fraud. Many crowd funding platforms have vetting criteria that need to be checked  before the crowd funding campaign can be posted. The N.C. JOBS Act adds some fraud- prevention measures for investment crowd funding in the state. The business must be a North Carolina company, the investors have to be N.C. residents, the money has to be put out in escrow in a North Carolina bank and the crowd funding platform has to be registered to do business in the state.