From Illinois Business Journal news services
SPRINGFIELD – A measure that aims to make Illinois more business friendly by instituting intrastate crowdfunding exemptions has passed both chambers of the Illinois General Assembly.
“Illinois has the vital infrastructure to promote job creation. Crowdfunding is the next step in embracing innovative business practices,” said Sen. Tom Cullerton, D-Villa Park, chief Senate sponsor. “This legislation creates an essential partnership between investors and small businesses to be successful and create jobs in our state.”
Crowdfunding is funding a project or venture by raising many small amounts of money from a large number of people. In exchange for funding, investors receive a small ownership interest in the enterprise.
House Bill 3429 creates an Illinois intrastate exemption, which allows Illinois residents to directly invest in Illinois small businesses online. Currently, 15 states have already passed similar legislation including neighboring states such as Indiana, Wisconsin and Michigan.
“The Illinois intrastate crowdfunding bill gives Illinois entrepreneurs and small business access to new sources of capital and incentivizes Illinois residents to invest locally,” said Anthony Zeoli, Chicago attorney and crowdfunding expert.
This legislation encourages local investment and would create new jobs in Illinois, supporters say.
“Allowing companies to raise reasonable sums of money from a large pool of Illinois citizens and providing investors with small ownership interests in the enterprises will stimulate our economy and create jobs,” said Elliot Richardson the CEO of the Small Business Advocacy Council.
HB 3429 passed the Senate and House with bipartisan support. The measure must still be sent to and signed by the governor.
The Small Business Administration says small businesses provide as many as 80 percent of new jobs each year.