It’s a good time to be a startup. Congress passed the Jumpstart Our Business Startups (JOBS) Act in 2012, making it easier for small businesses to access capital.
But before Title III of the act went into effect this past May, only accredited investors were allowed to partake in equity crowdfunding. Investors had to have an annual income of more than $200,000 or a net worth of at least $1 million, leaving the majority of the population out of the equation. But now you can become an investor in a company for as little as $100.
To raise funds through equity crowdfunding, businesses must go through a registered broker or funding portal that’s been approved by regulators. The approval process is costly and extensive, so State Representatives Beth Fukumoto Chang, Sylvia Luke, Angus McKelvey and Scott Saiki have proposed a bill that eases regulations to facilitate intrastate transactions.
The proposal, House Bill 2704, passed its second reading in the Senate and has been referred to the Committee on Ways and Means.
For now, two local businesses are eligible for equity crowdfunding through the funding portal Wefunder.com: Anikona Farm, a coffee company in Holualoa on the Big Island, and Kampachi Farms, an aquaculture enterprise based in Kona and Mexico. If House Bill 2704 passes, more businesses from Hawai‘i could be joining that list.
