Bill would expand online ‘crowdfunding’ for Delaware businesses

 

DOVER — Gov. Jack Markell on Monday announced a forthcoming bill that would expand online crowdsourcing with the aim of allowing businesses to raise funds with greater ease.

Legislation sponsored by Rep. Bryon Short, D-Highland Woods, and Sen. Brian Bushweller, D-Dover, would allow Delaware residents to invest in startups and small businesses, letting companies in the state offer equity stakes to residents through the Internet.

A business would be allowed to raise $1 million annually, and an individual could invest a maximum of $5,000 at one time.

“We need to make sure our laws keep pace with technology so that our small businesses have access to new methods of raising much-needed capital,” Rep. Short said in a statement. “Delawareans have a strong sense of pride in locally owned and operated businesses. This bill will take steps to help new companies by enabling Delaware residents to invest and participate in the success of homegrown Delaware startups.”

Gov. Markell mentioned the initiative in his January State of the State.

The bill has received support from members of both parties, as well as the business community.

“This bill is a recognition of the changing landscape of how businesses are conceived and financed in the 21st century,” Rep. Lyndon Yearick, R-Camden, said in a statement. “There are many examples of businesses that got their start through online crowdfunding. It’s time we allow Delaware entrepreneurs to tap into a resource that could help them turn a dream into a viable enterprise.”

“This is a good way to enable small businesses to more easily access the capital they need to grow,” State Chamber of Commerce President Rich Heffron said in a statement. “We support this legislation, and hope to see it become law.”

Reach staff writer Matt Bittle at mbittle@newszap.com

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