Maine House approves bill that would let entrepreneurs raise capital through crowdfunding

Posted Feb. 13, 2014, at 4:21 p.m.
The State House in Augusta in winter 2006.
Bridget Brown | BDN
The State House in Augusta in winter 2006. Buy Photo

AUGUSTA, Maine — The Maine House of Representatives on Thursday approved a bill that would give Maine entrepreneurs more leeway in how they raise capital to grow their businesses.

The bill, “An Act To Increase Funding for Start-ups,” would make it possible for Maine businesses to raise capital by selling small amounts of equity to individual investors. It essentially allows Maine entrepreneurs to participate in a fundraising model popularized by crowdfunding websites like Kickstarter.

Businesses interested in participating in crowdfunding would be required to register with the Maine Office of Securities and set a target amount to raise no more than $1 million. The business would also need to set a deadline by which it would need to hit its fundraising goal. If it is unsuccessful in hitting its goal by the deadline, all investors up to that point would have their money returned. No individual investor would be allowed to invest more than $5,000.

Senate President Justin Alfond, D-Portland, sponsored the bill, which he said would support Maine entrepreneurs and make the state “a national leader in turning ideas into jobs.”

“By allowing and encouraging small-scale investment in companies, Mainers tell the world, ‘If you have a vision and a plan, we want to support you and help your business grow,’” he said.

Jess Knox, the statewide innovation hub leader for Blackstone Accelerates Growth, which works to support entrepreneurship in the state, applauded the House’s approval of the bill.

“This is exactly the type of support that elected officials in Maine should focus on,” he wrote in an email. “This law could provide Maine’s entrepreneurs and micro-businesses a leg up toward success and growth over their competitors in other areas.”

The Senate, which voted on Feb. 6 to approve the bill, now needs to enact it, which it is scheduled to consider on Tuesday. If enacted, the bill will be sent to Gov. Paul LePage for his signature. He would have 10 days to sign the bill into law, veto it, or allow it to go into law without his signature.

The measure passed without a roll call in its initial Senate vote. The House supported it by a vote of 129-1, with Rep. Ricky Long, R-Sherman, casting the lone dissenting vote.

Adrienne Bennett, LePage’s press secretary, on Thursday wouldn’t comment on the governor’s intentions with regard to the bill.

“When it gets down here, we’ll take a look at the merits of the bill,” she wrote in an email.

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