The Washington State House today passed a proposed crowdfunding law with a 89-9 vote, as House Bill 2023 now moves to the Senate.
HB 2023 would allow Washington state businesses to raise up to $1 million during any 12-month period from Washington state residents in a crowdfunding campaign, with the funds being raised from non-accredited investors, as well as accredited investors.
As Joe Wallin wrote earlier this week on GeekWire, state-level crowdfunding would help those looking to raise money who may not know any accredited investors. Currently, almost all startups raise money solely from accredited investors under what is known as Rule 506 of Regulation D.
“The trouble with Rule 506 is that you have to limit your offerings to accredited investors,” Wallin wrote. “There is no ability under Rule 506 to raise small amounts of money from lots of people, including non-accredited investors, in a crowdfunding campaign.”
HB 2023 could change that, if passed.
“It is an important bill,” Wallin noted. “It would send a signal to the entire world that Washington takes the business of starting and growing companies seriously, and is willing to amend its laws to bring them up to date with the 21st century.”
Read more about the potential implications of the bill here.
Update, 2:05 p.m.: This story originally noted a unanimous House vote, and we’ve since corrected that to show the 89-9 vote.