Small businesses could seek start-up capital through new avenues under a bill heard by the Banking, Commerce and Insurance Committee Feb. 2.<\/p>\n
Under LB226, introduced by Lincoln Sen. Colby Coash, small businesses could raise up to $2 million each year from accredited or unaccredited investors. Coash said that Nebraska currently ranks very low in access to capital for small businesses.<\/p>\n
\u201c[LB226] creates incredible opportunities for startup companies that otherwise do not have easy access to capital,\u201d he said. \u201cIt allows an individual working out of his garage looking for a way to expand, to actually move forward to raise funds and meet investors.\u201d<\/p>\n
All projects attempting to raise money would require approval from the state Department of Banking and Finance. Individuals investing money under LB226 would receive a proportionate security stake in the company in exchange for their investment, without registration under state and federal securities laws. Unaccredited investors would not be allowed to invest more than $5,000 in a particular company.<\/p>\n
Investors must be residents of Nebraska and would be required to sign a certificate acknowledging the potential for the complete loss of investment.<\/p>\n
Steve Bradford of Lincoln spoke in favor of the bill. He said that it would help narrow the small business capital gap.<\/p>\n
\u201cVery small businesses, especially startups, have difficulty raising money,\u201d he said. \u201cSmall businesses could raise money much more effectively if they could offer securities. [LB226] strikes a good balance between protecting investors and offering small businesses a relatively inexpensive way to raise capital.\u201d<\/p>\n
Ann Post, representing Lincoln Independent Business Association, also supported the bill, saying that it was a creative solution to keeping businesses in the state.<\/p>\n
\u201cWe see entrepreneurs every day working so hard to make their idea a thriving business. This is just another tool to keep innovation and talent in Nebraska,\u201d she said.<\/p>\n
No one testified in opposition to the bill and the committee took no immediate action on it.<\/p>\n","protected":false},"excerpt":{"rendered":"
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