Crowdfunding can provide an alternative source of funding for businesses seeking capital to launch or expand operations. Instead of relying on a single investor, businesses raise smaller amounts from many individuals through a qualifying investment offering.
However, raising capital through crowdfunding is regulated under Oregon business law. Businesses must satisfy several requirements before using this exemption, making careful planning essential before launching a campaign.
Register and operate in Oregon
Only businesses that are properly registered and actively conducting business in Oregon may rely on the state’s crowdfunding exemption. This requirement helps ensure the offering is tied to a legitimate Oregon business rather than an out-of-state entity seeking local investors.
Offer investments only to Oregon residents
The exemption is designed for local fundraising. Securities offered under these rules may only be sold to Oregon residents. Accepting investments from individuals outside the state could require compliance with additional securities laws and potentially invalidate the exemption.
Provide required disclosures
Before an investor makes a final investment decision, the business must provide formal disclosure documents. These disclosures should clearly explain the business, the proposed investment, the intended use of funds, and the potential risks so investors can make informed decisions.
Keep advertising within the allowed limits
Businesses may promote their crowdfunding offering, but advertising must remain within the limits permitted under Oregon law. Promotional materials should be factual and avoid misleading statements or promises about future returns.
Follow the investment limits
Oregon also limits how much each individual may invest under this exemption. No single investor may contribute more than $2,500 to one investment offering. This limit is intended to reduce financial risk while still allowing businesses to access community funding.
Build your campaign on compliance
Crowdfunding can support business recapitalization and future growth, but success depends on following the applicable legal requirements from the beginning. Careful compliance with Oregon business law can help protect both your business and your investors.
If you are considering raising capital through crowdfunding, seek legal guidance before launching your offering to help ensure your fundraising efforts comply with Oregon’s securities requirements.