The JOBS Act: Localizing Equity Crowdfunding

William Carleton, Contributing Editor, VCExperts

If you are involved or interested in the equity crowdfunding movement and are starting to have misgivings about the viability of the federal exemption under the JOBS Act, I have a suggestion for you:

Go directly to Joe Wallin's new post about taking the cause to the state level.

Joe's post is ostensibly about seeking an equity crowdfunding exemption in Washington State, but there's nothing unique about Washington to keep you from trying Joe's approach in any other state.

As I said in a comment on Joe's blog, the idea blows my socks off. Of course going local is the correct next front. And with a nascent equity crowdfunding industry already practiced at meeting with regulators and internalizing their concerns, the people to make the case, state by state, are in place.

There's at at least one good reason to think NASAA won't get behind this: the draft equity crowdfunding exemption the organization circulated to member state securities agencies in an unsuccessful, 11th hour attempt to divert the US Congress from proceeding with legislation for a federal exemption. A state exemption modeled on that NASAA draft would be little better, or no better, than the one that passed as Title III of the JOBS Act.

But what if NASAA, eager to reclaim for its members the jurisdiction of states over offerings which NASAA so strongly feels by right and by nature belong under state purview, were to respond to the inevitable disappointment of the equity crowdfunding industry by saying, look, let's try again; if we can set the investment levels appropriately and have recourse to the bad actors, we'll exempt these seed deals from merit review.

Having NAASA's involvement could be useful to the extent willing states and advocates wanted to prioritize the ability to conduct offerings across state borders.

Joe's idea doesn't depend on NAASA's blessing however. It depends instead on the progressiveness of a single state agency.

And then a second. And a third . . .

Photo from Toronto Public Library Special Collections, via Flickr.

William Carleton

Bill is a member of McNaul Ebel Nawrot & Helgren PLLC, a Seattle law firm. He blogs every day at