Crowdfunding in Colorado Is Now Available

Abstract

The 2015 Colorado General Assembly adopted the Colorado Crowdfunding Act which created an exemption in the Colorado Securities Act for capital formation through securities-based crowdfunding based on the federal intrastate exemption. This can be accomplished through broker-dealers, sales representatives, or on-line intermediaries to Colorado residents by Colorado businesses under the federal intrastate exemption for the offer and sales of securities. The Securities Commissioner has adopted rules implementing the Colorado Crowdfunding Act. This article discusses crowdfunding in Colorado as defined by statute and the rules. This article also addresses questions which have not been addressed in other articles on crowdfunding, including the obligations of an issuer to its new (and potentially numerous) equity investors and the significant issues regarding transferability of crowdfunded securities.This article also discusses amendments to the Colorado Crowdfunding Act enacted in 2016.