May 24, 2019

New Crowdfunding Rules Released by Division of Securities

The Colorado Crowdfunding Act, HB 15-1246, was signed into law by Governor Hickenlooper on April 13, 2015, with an effective date of August 5, 2015. The goal of the Act was to increase equity opportunities for Colorado start-ups by creating a crowdfunding option with limitations to protect investors. The Act required the Securities Commissioner to promulgate rules and regulations in order to protect small businesses and investors.

The Colorado Department of Regulatory Agencies’ Division of Securities released comprehensive new crowdfunding rules on Thursday, July 30, 2015. The regulations are available here. The Division of Securities also issued guidelines about the new rules, noting that before a business can take advantage of the new crowdfunding rules it must file various forms with the Division of Securities; there are limits to how much money can be raised and how much individual investors can contribute; and all aspects of the transaction must take place between Colorado residents. The Division’s guidelines are available here.