Crowdfunding investment fund proposed for Katahdin-area businesses
A community group that promotes development in the Katahdin region is developing an equity crowdfunding platform so people can invest in Katahdin-area businesses.
The Bangor Daily News reported that the effort is led by a Medway native and executive at Boston-based Standish Mellon Asset Management Co. LLC, Michael Faloon Jr., a board member with the group, Our Katahdin. The fund’s offering documents are under legal review and should be finished by December, the paper reported.
Faloon told the BDN that the OurKatahdin Capital investment fund may be the first of its kind.
It would utilize new federal rules proposed in the 2011 Jumpstart Our Business Startups Act, or JOBS Act. The legislation proposed rules to open up equity crowdfunding, a way to raise capital over the Internet, to more people. The Securities and Exchange Commission is expected to approve on Friday its final set of rules governing crowdfunding, the Wall Street Journal reported Tuesday.
The rules would allow anyone to invest up to $2,000 or 5% of their annual income or net worth, whichever is greater, in small-scale fundraising projects, the Journal reported. Currently, only individuals with more than $1 million in net worth or who earn more than $200,000 a year are allowed to participate in crowdfunding.
Under the OurKatahdin Capital plan, the board of directors would administer the fund, the BDN reported. Established Katahdin region businesses and startup businesses approved by the board would be included in the fund.
Faloon told the BDN he hopes for a 6% return on investment for investors.
Our Katahdin is an all-volunteer nonprofit organization working to promote community and economic development in the region,
Correction: This article has been changed to correctly identify the group developing the equity crowdfunding platform.
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