Florida lawmakers to consider allowing equity crowdfunding

Florida lawmakers to consider allowing equity crowdfunding

Matthew Richardson
Orlando Business Journal

If approved by the state Legislature, equity crowdfunding could net more money for Florida startups.Crowdfunding sites like Kickstarter may be old hat for some early-stage startups in Florida if House Bill 275 is approved by state lawmakers.

House Bill 275 would legalize equity crowdfunding — a financial process that allows companies to accept funds from investors in exchange for company stock. The kicker is that potential investors don’t have to be overly wealthy, which opens the pool for more investment capital.

Orlando entrepreneur Carlos Carbonell, PowerDMS General Counsel Matthew Huggins, and business lawyer Jonathan Kilman are behind the bill, which is being sponsored by Rep. David Santiago, R-Deltona. The first reading of the bill was March 11.
Kilman, a partner with law firm Foley & Lardner LLP, said the bill is a big opportunity for small firms because it helps close the gap between family funding and venture capital. “The challenge that early-stage companies face is access to capital. We have angel investing in Florida and some venture capital, but this is another opportunity to obtain investment capital.”

As of now, 13 other states have legalized equity crowdfunding, and last year, the Florida bill to allow it failed as rules were not in place to avoid businesses running scams to collect funds.

Kilman hopes this year will be different, as he is working closely with the Florida Office of Financial Regulation and the legislative staff. “We’re gaining momentum, and the more people know about this bill, the more confident they’ll be about it. We have other states that serve as examples how this can be done.”

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