Can I use crowdfunding to raise money without violating securities laws in Idaho? What are the requirements?

Requirements for Crowdfunding in Idaho

Crowdfunding is a method of raising capital through the internet by soliciting small individual investments or contributions from a large number of people. Federal securities laws and regulations do not currently prohibit equity crowdfunding ^[5]. However, there are certain requirements that must be met to avoid violating securities laws in Idaho.

Securities Laws in Idaho

In Idaho, securities are regulated by the Idaho Department of Finance. The Idaho Securities Act requires that all securities offerings be registered with the Department of Finance, unless an exemption applies ^[2]. Crowdfunding offerings may qualify for an exemption under the Idaho Securities Act if they meet certain requirements.

Requirements for Crowdfunding Offerings

To qualify for an exemption under the Idaho Securities Act, a crowdfunding offering must meet the following requirements:

• The offering must be made through a registered broker-dealer or a registered crowdfunding portal ^[2].
• The issuer must be a resident of Idaho or have its principal place of business in Idaho ^[2].
• The offering must be limited to $5 million in a 12-month period ^[2].
• The offering must be made to residents of Idaho ^[2].

Conclusion

To use crowdfunding to raise money in Idaho without violating securities laws, the offering must meet the requirements of the Idaho Securities Act. This includes limiting the offering to $5 million in a 12-month period, making the offering through a registered broker-dealer or crowdfunding portal, and limiting the offering to residents of Idaho.

Source(s):

• [2] Frequently Asked Questions » Business.Idaho.gov
• [5] LEGISLATIVE REPORT: ACT 199

Jurisdiction

Idaho

• General