Legislation advancing in the General Assembly would implement intrastate equity online crowdfunding in Illinois. House Bill 3429, sponsored by state Rep. Carol Sente (Vernon Hills), gives Illinoisans the opportunity use the internet to invest directly in small business.
“Illinois needs to stay competitive with other states, which means we must be open to exploring new policies that will empower small business owners and help stimulate our state economy,” Sente said.
“This bill could be a game-changer for small businesses and entrepreneurs in our state. Illinois is full of talent, and this legislation will enable these individuals to access the capital they need to create the next crowdfunded project in our own backyard.”
House Bill 3429 would allow small businesses and startups to use the internet to solicit funds from both investors with reasonable investment limits, while still protecting the interests of consumers. Entrepreneurs may raise up to $4 million per year with audited financials and “non-accredited” investors may invest up to $5,000 each year per business.
The federal Jumpstart Our Business Startups Act (“JOBS Act”) provides a federal interstate version of this crowdfunding exemption under the Securities Act of 1933. Federal rules have not been finalized to implement it and legislation similar to House Bill 3429 to authorize intrastate crowdfunding has already been adopted in fifteen states, including Michigan, Indiana and Wisconsin. Illinois’ investments caps are higher than the neighboring Midwestern states.
House Bill 3429 received unanimous support in the House and is currently undergoing consideration in the Senate.
