The Texas Intrastate Crowdfunding Law has been approved and is coming open for use later this month. I sat on a Town Hall panel yesterday organized by Cynthia Nevels. With me were Patricia Loutherback of the State Securities board of Texas and John Johnson of Goldstar Trust whose bank handles funds escrow.
The audience consisted of portals preparing to use the Intrastate law. By my count, there are eleven portals lining up for it. Two are focused on oil and gas, two focus on real estate, and the rest cover startups. The audience asked questions of the panel about the specifics of the law and use cases that may come up. One audience member asked about how to handle situations where non-Texas residents use deception to gain access to the offerings. This appears to be problematic as it violates the securities laws and puts the entire deal at risk. Once funds are invested in a startup there's little chance of recovering the funds.
The board recently setup a web page on information for the investor which you can see at this link.
The page describes how to read the disclosure documents and assess the risk of investing in a startup. Even if fraud is detected the chance of recovering the funds is quite low. Equity acquired through the ruling can be sold but only after a nine month waiting period and only to a Texas resident.
Since the legislature does not drive the Intrastate Law but rather the State Securities board does, there's an opportunity to meet and dialog with them on a regular basis about the rules and procedures. We are contemplating a quarterly meeting for those who want to engage the board on the topic. If you're interested in joining these sessions, please let me know your interest and I'll include you on the invite list.
Best regards,
Hall T.
