November 7, 2016

Oregon Intrastate Offering Exemption (Crowd Investing Law)

Americas
Policy/Program
Description of the core change(s) brought by this policy instrument

Access to capital for entrepreneurs in various forms of equity or debt, and engagement of customers and clients (every Oregonian) as investors.

Please list the implementing agencies

Hatch Innovation (nonprofit) (www.hatchthefuture.org  and  www.hatchoregon.com )

Please name the policy advisor(s) or leader(s) who have been key in introducing and/or designing this policy instrument

Amy Pearl, Hatch Innovation (founded Hatch Oregon to implement), worked with Oregon’s finance regulator Aeron Teverbaugh (lead). Other Oregon leaders on the team across the state.

Lifecycle of target firms for this policy instrument
Start-up firms
Support offered
Indirect Financial Support
Level of intervention
Ecosystem-level
Barrier(s) addressed with this policy tool
Access to Capital
Cultural/Mindset
Regulatory
Ecosystem Engagement/Coordination
Policy timeline

First statewide meeting led by Amy Pearl to define goals for crowdfunding law held in May 2014, Pearl wrote a first draft, submitted to state, rulemaking chosen as the legal mechanism (over statute, for speed), final rules published as law January 15, 2015. 

Stated goal/metrics of the policy instrument
  1. Capital formation for Oregon-based startups and businesses
  2. Increase knowledge about investing for citizens,
  3. Improve the startup ecosystem.
Evidence of results

One transactional platform launched which has helped raise over $440,000 for over a dozen startup companies, fostered over 400 new investors, created a new statewide accelerator for use of the law, and has caused federal (USDA) and local foundations to provide support for capacity building across the state’s business infrastructure.

Challenges, criticisms and lessons

Local investing and crowdinvesting overall is still new, requires education at all levels. Entrepreneurs often don’t have experience choosing and designing deal terms. Infrastructure for this kind of investing still very weak, though untapped capital potential is great. Benefits of this kind of community-based capital attracting new kinds of potential entrepreneurs such as Native Americans and rural.

Notes and additional context

This is a state-based policy, though it was 16th in the nation and there are now over 30. The state’s regulators helped craft (and sponsor) this exemption so the state’s would-be critics of crowdinvesting for ordinary citizens were invited to engage early, lowering barriers and building support. Oregon is considered a “flyover” zone between CA and WA so local capital was needed to develop a more entrepreneurial culture. Oregon is also a rural state, so new financial tools were needed. Banks are seeing this as a means to “bankability”, some creative financing resulting.  

Geographic scope
Sub-national