From Illinois Business Journal news services
SPRINGFIELD – Crowdfunding of new businesses gets a boost in a newly signed bill that takes effect the first of next year.
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.
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.
State Sen. Tom Cullerton, D-Villa Park, said his initiative aims to encourage local investment and economic development opportunities.
“We need to continue to embrace innovative and fresh business practices to promote job creation in Illinois,” said Cullerton. “Intrastate crowdfunding gives businesses the resources to find financial support without accumulating loads of debt, while giving the average person an opportunity to invest in companies they support.”
House Bill 3429 was signed into law on July 29.