Murray hopes to spur capital with crowdfunding measureOct 5, 2017 By Daniel Bendtsen, Staff Writer
Wyoming Secretary of State Ed Murray on Monday unveiled a new equity crowd-funding program entrepreneurs can use to access capital.
The intrastate system allows entrepreneurs to offer shares in exchange for investments.
Crowd funding has become a popular tool for start-ups on platforms like Kickstarter. However, until recently, both state and federal regulations banned businesses from offering shares as part of their crowd funding process.
After extensive lobbying from start-up advocates, the U.S. Congress passed a law in 2012 to allow regulated equity crowd funding on a national level, while also setting up a framework for states to set up their own crowd funding exchanges.
While the Securities and Exchange Commission took four years to finalize its rules, states began setting up their own systems more quickly.
Wyoming updated its own Uniform Securities Act in 2016 to allow its own intrastate version of crowd funding.
Murray championed the law change, which now allows Wyoming-based entrepreneurs to offer shares to investors who also live in the state.
Though the SEC version of equity crowd funding is now live, Murray told The Ranger that it was still important to set up a Wyoming-specific system so that businesses can avoid the burden of SEC's "bureaucratic rules and regulations."
"Wyoming, while it ranks No. 1 for favorable places to start a new business, ranks dead last in access to capital," Murray said.
As a former businessman, Murray said he learned how important access to capital is after getting his start through a "character loan."
However, Murray said those traditional sources of capital have started to dry up as they've "become subject to enormous governmental and bureaucratic red tape."
When entrepreneurs don't have significant collateral, he said it's now nearly impossible to get a "character loan" from a bank.
In an effort to make his office "business-friendly," Murray said he's trying to open up "all forms of capital."
Under the new equity crowd funding system -- dubbed Wyoming Invests Now -- the Secretary of State's office will act as the paperwork repository for deals between investors and entrepreneurs.
"There are deals that are starting to be in the works that will be completed this year that will use this crowd funding initiative," he said.