Video by Cory Dawson/VtDigger.org
Changes to the Vermont Small Business Offering Exemption (VSBOE) have been a priority at DFR for many months. On Monday, June 16, 2014, the Department announced that the proposed changes have been approved. These changes are expected to make raising capital easier for our small businesses.
These important modifications to current securities regulations are expected to drive innovation, promote job growth and support Vermont entrepreneurship while protecting the interests of investors. The revised regulation allows Vermont businesses and start-up companies to raise up to $2 million in capital by selling shares in their company to in-state investors. It also allows for a simplified process to reduce the regulatory burdens and costs usually associated with securities registration.
Traditionally, federal and state securities laws have limited investments in small businesses to wealthy individuals. VSBOE gives all Vermonters the opportunity to support their local entrepreneurs, existing and new small businesses. Participating businesses will be registered with DFR and will allow individual investors to purchase up to $10,000 in stock equity from a single business. VSBOE also allows certain high net-worth individuals to purchase an unlimited amount of equity.
As part of his efforts to boost economic development in the state, Gov. Peter Shumlin called for this rule change in his annual budget speech in January 2014.
The Department has issued guidelines for small business owners concerning the type of information and disclosures that should be provided to prospective investors under a VSBOE offering. Those small businesses and start-ups interested in VSBOE are encouraged to contact the Department’s Securities Division at 802-828-3420 to learn more.