Gather around everyone – it’s time for a history lesson.
This chapter is about the set of rules that allow Community Public Offerings (CPOs) in this state. If you’ve been hiding under a rock for the last 11 months, let us explain: a CPO is like a min-IPO, entirely within Oregon. In short, if you live in Oregon, you can now invest in small, local companies.
At this point you’re thinking “I’m a busy person! I don’t have time for a history lesson!”
Well…do you have time for five bullet points?
- May 2014: Amy Pearl brings together a founding team of local leaders, entrepreneurs, state officials and lawyers to Hatch, to chat about investment crowdfunding in Oregon. It begins…
- June – August 2014: Meetings are held with the founding team to put together a set of rules that will democratize investing and improve access to capital for small Oregon businesses.
- September 2014: Amy compiles the group’s decisions, and submits a draft of the rules to the Division of Finance and Corporate Securities. After some revisions, a draft is prepared for feedback.
- December 2014: The comment period closes, and the DFCS staff prepare the final rules.
- January 2015: The rules go live, and entrepreneurs launch their offerings at a party at Hatch Lab in Portland. Woohoo!
That’s it. In less than a year, we made it happen.
Oregon was actually little late to the intrastate crowdfunding game: fifteen other states passed their laws before us. What this means is that we had plenty of other examples to look at (such as Vermont, which was first to exclude extractive industries from raising capital this way). What this also means is that we were able to look at how the laws were actually being used in each state (if at all). We were able to use that knowledge to create something that was easy to use and accessible, yet offered investor protections. After all, investing can be risky.
We’re incredibly proud of our leading part in creating these rules. Before them, small businesses were unable to offer investment opportunities to the vast majority (about 99%) of Oregonians. This was especially tough on those businesses in rural and underserved communities, which often have few options for capital in their early stages. Now, every Oregonian can invest, no matter their wealth. We’re all angel investors. We get to at least have a chance at making a financial gain on our investments, instead of receiving t-shirts and keychains. We get to pull money from Wall Street and put it in our backyards. We get to have a say in the economic development of our state.
These rules weren’t written to keep the status quo, where those with the most cash call the shots. Words like “10x”, “gazelle”, “exit” and “pivot” have been replaced with words like “local”, “community”, “long-term” and “support”. We’re not abandoning the idea of profit, by any means. We’re just abandoning the idea of profit at the expense of real value. Surely we’re not the only ones that think this way!
These rules result in the wealthy and not-so-wealthy alike having access to investing opportunities in their own communities. All kinds of businesses – not just apps and widgets – get to benefit by these rules. Local investing fosters real bonds between local businesses and community members when the entire community is allowed to invest. In short, this is what crowdfunding should look like.
In one month, Oregon will celebrate it’s 1 year anniversary of launching the Oregon Intrastate Offering Exemption. Here’s how it’s shaped up so far:
- 15 companies have used the law to launch community public offerings
- One company has completed their maximum raise (Red Wagon Creamery at $120,000)
- Four additional companies have raised at least their minimum
- Almost 300 Oregonians have invested
- $323,624 total has been raised
If you live in Oregon, check out your local CPO investing opportunities here.