The new law allows someone trying to start a small business in Alabama to use social media and advertising to find small investors who live in the state.
The “crowd funding” is limited to raising $1 million, and it is restricted to Alabama businesses and investors because of federal regulations. The investments are capped at $5,000 for most people to limit risk.
Securities Commission Director Joe Borg said, “While investment in startup businesses has risk, the potential rewards in promoting new businesses and job formation in our local communities are invaluable.”
My opinion: Love it. The bill seems to be a great mixture of progressive ideas — utilizing the technology of our time to promote new businesses in Alabama. This makes Alabama just one of a handful of states that have crowd funding exemption laws (find out more about Crowdfunding Laws here).
The area of our economy that I see this benefiting the most are low skill jobs. Startups typically need “man-power” as they grow. At the same time, if one of the startups becomes wildly successful, Alabama will reap the benefit of those tax dollars; thus, feeding back into our public systems and empowering our citizens even further.
I also enjoy the caution built into the bill as well — limiting the risk of failure or fraud by placing limits on the crowd funding.
The fact that Alabama is showing itself to be forward thinking about its job creation ideas is fantastic. I hope our Legislature continues to promote, construct, and pass more bills of this nature to show other states that Alabama is a leader in new ideas instead of just trying to reuse old ones.