In April 2015, the Arizona Governor Doug Ducey signed House Bill 2591 known as the “Intrastate Offering Exemption” as a job creation initiative. This new law allows any Arizona resident the ability to invest up to $10,000 in an Arizona-based business. Residents that meet the accredited investor requirements are not subject to the $10,000 limit. Additionally, the law allows entrepreneurs to promote the sale of equity ownership in their businesses on portals such as the FundMyBusinessAZ.com website so long as they comply with the Crowdfunding Provisions. This is a landmark piece of legislation that can completely change the way that businesses raise money. By making it possible to sell equity (shares of stock or ownership of the company), this opens the door for many more investors to get involved and fund private businesses. We believe this will facilitate more businesses coming into the market, because they will finally have access to the capital they need to get started. In the past, only wealthy people were able to invest in small companies. There were limits on the number of small investments that could be made to companies. With the passing of the Intrastate Offering Exemption, small companies are now able to sell equity directly to investors online
The FundMyBusinessAZ.com portal uses advanced technology to connect investors together online with quality investment opportunities that meet the states standards. We offer education and consulting services relating to the equity Crowdfunding Provisions, assistance in preparing and reviewing disclosure documents, and posting the entrepreneurs projects on our website. Our website features include escrow and accounting services, esignature, payment processing, bad actor checks, anti-money laundering oversight as well as an on-line deal room for confidential document sharing. We also offer fund readiness assessments as a service and offer resources to our entrepreneurs as appropriate.
How Arizona Equity Crowdfunding Works
Crowdfunding is the art of successfully combining small investments from a very large number of people at the same time to finance a new business venture. The FundMyBusinessAZ.com equity crowdfunding platform was designed to showcase entrepreneur’s projects and connect potential investors from around the state of Arizona.
Investors can go to our website, read information on the business proposal, and then have the opportunity to securely invest in the business. The crowdfunding platform then tracks the money and eventually distributes it to the entrepreneur at a specific time. The investors can be compensated for their investment by receiving an ownership stake in the business, based on the amount that they invested. The payments to the entrepreneurs are handled through an Arizona financial institution.
The Intrastate Offering Exemption allows companies to raise no more than $1 million through this method in a 12-month period if the issuer has not undergone a financial audit in the prior fiscal year. Or, no more than $2.5 million in a 12-month period if the issuer has undergone a financial audit in the prior fiscal year and makes the opinion letter and supporting documentation available to the prospective purchasers.
The FundMyBusinessAZ.com crowdfunding portal is open to any legal industry. The main industries currently utilizing crowdfunding are real estate, tech, medical and the film industry. Additionally, we believe there will be tremendous growth in customer-service based industries such as retail and restaurants where entrepreneurs with a loyal customer base may be able to access additional capital from investors that are already loyal to the brand.
Entrepreneurs must be organized in the State of Arizona and are not allowed to market their companies to non-Arizona residents. All entrepreneurs as well as investors provide credentials that are verified in order to invest. Entrepreneurs risk voiding their exemption if they solicit to non-Arizona residents, if they do and we find out they will be not be allowed to use our portal.
What does it mean for investors?
We provide the opportunity to access early-stage companies in Arizona that need capital to grow and expand their business. Gain direct access to previously inaccessible opportunities in the private market and enjoy the privileges of ownership in Arizona-based startups and small businesses.
Contact us today with questions about equity crowdfunding in Arizona.