We have bumper stickers that proclaim our state area code. We wear shirts decorated with nothing more than the outline of our state – and they look wonderful. We love helping each other out. We go out of our way to buy Montana products and hire other Montanans.
It only makes sense. We love our isolated spot on the map and our isolation has meant that Montana – and Montanans – are largely on our own.
That’s why I asked the 2015 Montana Legislature to allow crowdfunding and I’m pleased to say they agreed with me. House Bill 481, sponsored by Rep. Chuck Hunter, D-Helena, becomes law on July 1 and it will change the way Montanans can raise money to start and grow a Montana-made small business.
Crowdfunding – especially the unique variety adopted in our state – levels the playing field between the wealthy and the rest of us. It allows one Montanan with a good idea, and a lot of friends, the chance to change the world.
Traditionally, an entrepreneur who needs to raise start-up capital for a business follows a formal structure of registering the investment opportunity as a “security” or must fit within the restrictive confines of an exemption from registration. This structure is a good one; it’s what ensures that Montanans are not victimized by worthless investment opportunities that sound good coming from a smooth talker.
Technology has changed things since that structure was formalized. The world has changed. Today, someone experiences a misfortune, a friend sets up a “gofundme” page, and we all give five dollars. Those kinds of small-dollar, high-involvement campaigns have been life-savers for people trying to raise money for any number of personal causes.
However, until my crowdfunding bill passed, it was illegal in Montana to use a similar set up to raise money for a small business.
Starting this July, if you have a business established and registered in Montana, you can raise up to $1 million in capital without going through the formal process of traditional securities registration. There are caveats: No investor can invest more than $10,000 and all investors must be from Montana.
This bill puts the power to raise money – to help build a Montana business from the ground up – in the hands of regular people. We don’t have to be a registered security salesperson, to know someone who is, or to have a lot of money to make a real difference for a small business.
I was very proud to see crowdfunding become a reality, but it wasn’t the only bill I pushed for in 2015 that helped level the playing field for all Montanans. We also:
- Allowed private insurance companies to sell a new kind of insurance – natural disaster multi-peril insurance – which combines flood, earthquake and landslide insurance into one product. This bill, sponsored by Rep. Kelly Flynn, R-Townsend, was a big win for Montanans who have had no alternative than to buy flood insurance through the federal government. Those policies are going up in price – even if Montanans have no losses – and this new product puts dollars in Montanans’ pockets.
- Clarified that any data your vehicle is recording while you drive belongs to you – not your insurance company. Many vehicles sold today have “black boxes” that record certain information about your driving. That information may be useful, but it belongs to you, not your insurance company. I was happy to work with Rep. Ryan Lynch, D-Butte, to put this common sense into Montana law.
- Stiffened the penalties for those who swindle elderly Montanans through securities fraud. This same bill, House Bill 57, sponsored by Rep. Moffie Funk, D-Helena, also allows senior victims of fraud to recover more from the Montana Securities Restitution Trust Fund. Financial crimes against the elderly are increasing all over the country, including in Montana. These crimes cost Montanans not only money, but their independence. Many elderly Montanans are too embarrassed to admit they were taken.