Galvanize Fort Collins is First Stop on Bennet Pathways to Innovation Tour
Fort Collins, CO - Today, Colorado U.S. Senator Michael Bennet toured Galvanize in Fort Collins and met with local investors, entrepreneurs, and startups to discuss their need to access capital and the law Bennet passed that allows them to use crowdfunding to attract investments. Bennet wrote the bipartisan measure with Senators Jeff Merkley (D-OR) and Scott Brown (R-MA). It was signed into law in 2012 as a part of the JOBS Act.
Bennet's crowdfunding law provides an alternative process for small businesses to raise capital by allowing companies to raise up to $1,000,000 annually through internet websites registered with the SEC. The law requires the SEC to implement basic marketplace protections for the retail investors. Websites seeking to list companies must register with the SEC and provide investors basic information about the companies they list. The SEC recently released the final rules in October. They are scheduled to go into effect in May.
"Access to capital is essential to strengthening small businesses and to driving growth in the state's booming high-tech and startup communities," Bennet said. "By allowing companies to harness the power of social media, crowdfunding has the potential to be an important to tool to help them raise the capital they need and provide new opportunities for investment. As new technologies emerge, we must continue to find new ways to build our innovation economy and support the industries creating the jobs of the future."
The crowdfunding principle is already at work online on websites such as Kickstarter, which rely on bunches of relatively small dollar participants for their success. Kickstarter primarily supports artists and film productions and investors do not receive a return on their investments. It does not disburse funds to a given project until it has secured all necessary funding to proceed. In equity-based crowdfunding, a start-up venture or an existing business would publish information on the business and invite potential small investors to offer capital. Once pledges for a project reaches a predetermined threshold, the deal moves forward and investors are eligible for a return on their investment.
Fort Collins has a booming high-tech and startup community and has been ranked the fourth best city for tech jobs and the 6th most innovative tech hub in America.
This is the first stop on Bennet's Pathways to Innovation Tour. This week, Bennet is traveling up and down the Front Range visiting Colorado companies to highlight the state's thriving innovation economy and to discuss steps to continue to support its growth.