Crowdfunding investments for small business approved

Small businesses may seek startup capital through new avenues under a bill approved May 21 by the Legislature.

Under LB226, introduced by Lincoln Sen. Colby Coash, small businesses may raise up to $2 million each year from accredited or unaccredited investors.

All projects attempting to raise money will require approval from the state Department of Banking and Finance. Individuals investing money under LB226 will receive a proportionate security stake in the company in exchange for their investment, without registration under state and federal securities laws. Unaccredited investors will not be allowed to invest more than $5,000 in a particular company.

Investors must be residents of Nebraska and will be required to sign a certificate acknowledging the potential for the complete loss of investment.

The bill passed 48-0.