Comment by:
C. Marshall Horsman III

38 Campbell L. Rev. 365 (2016)

ABSTRACT.   The nationwide increase in the number of small businesses over the past several years has led to more small businesses, startups, and entrepreneurs seeking capital investments from the general public in order to build and grow their businesses. In an effort to attract investors, businesses have taken an interest in securities crowdfunding, a method for raising capital whereby businesses offer stock in their companies in exchange for capital from investors. While an offering of securities generally must be registered with the United States Securities and Exchange Commission, companies can circumvent the registration requirement by utilizing one of the available exemptions provided by federal statute. This Comment focuses primarily on the intrastate exemption, which allows businesses to sell securities if the offering is wholly contained within a single state, but only if that state has given businesses the option to use that exemption. Since 2011, over half of the states have passed legislation permitting businesses within those states to take advantage of the intrastate exemption. North Carolina, through the NC PACES Act, is considering passing such legislation, yet that bill has been stalled in the North Carolina General Assembly since April of 2015. This Comment highlights the benefits that North Carolina can enjoy by allowing intrastate securities crowdfunding and ultimately calls for the General Assembly to pass the NC PACES Act.

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