Crowdfunding investment comes to Oregon
Oregon joined 15 other states last week in implementing new rules that allow startup companies to raise money by crowdfunding small investments. Authorized by Congress in the 2012 Jumpstart Our Business Startups (JOBS) Act, the Oregon rules went into effect on January 15.
Now, citizens of the state of Oregon can invest up to $2,500 in a single company and local startup companies can raise up to $250,000 to support their growth. Think of it like Kickstarter or IndieGoGo, but instead of receiving gifts, backers own a portion of the company.
Like investing in any startup company, backers face the possibility that they could loose their money; however, supporters believe the benefits of the program far outweigh the potential risk to investors.
Despite the fact that startups are the leading source of economic growth in the United States, securing seed funding for a startup has traditionally been very difficult. By empowering more citizens to invest in their local communities, proponents hope to generate more capital across the state—as much as $1 billion if every citizen in the state donated just 1% of their retirement savings.
The Oregon rules were championed by Hatch Innovation, a nonprofit led by Amy Pearl. The group, in partnership with Slow Money South Willamette Valley and the Willamette Farm and Food Coalition, has organized a kickoff party tomorrow at the Red Wagon Creamery in downtown Eugene.
Starting at 6:00 p.m., residents from the Eugene/Springfield area can join Mayor Kitty Piercy, Senator Floyd Prozanski, and other guests to learn more about the program, meet the first companies using the system, and make their first investments.
To RSVP for the Hatch Oregon Launch Party, visit their EventBrite page to reserve a space. The event is free and open to the public, but registration is required.