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Crowdfunding Investments Take Shape In Oregon

This month, Oregon is expected to join 15 other states in implementing new rules that allow startup businesses to raise money through crowdfunding investments. But unlike the previous adopters, small business owners have aligned to better spread the word.

"It's the biggest earthquake no one may feel," said Amy Pearl of Portland-based .

For the past decade, regular Joes have put their money toward proposed companies on crowdfunding websites, like Kickstarter, and received a small gift in exchange. In 2012, federal lawmakers passed the JOBS Act, which allows small businesses and start ups to make investing through crowdfunding an option. Regulators have yet to flesh out national rules for that type of investment, so many states have passed their own laws to meet local demand.

Pearl, local entrepreneurs and community members created Hatch Oregon, which was at the forefront of working with state lawmakers to develop Oregon's Community Public Offering rules. Through CPO laws, Oregon-based businesses can raise as much as $250,000 through local crowd funding, and Oregonians can invest up to $2,500 per company.

"We think this rule will give small businesses an opportunity to raise the capital they need to expand and grow – which could spark economic development throughout the state," said Lisa Morawski, spokeswoman for the Department of Consumer and Business Services, in an email. "Smaller businesses currently have very few options for raising money."

To ensure that Oregonians have an opportunity to get a piece of the booming, small-business pie, meant to educate the first adopters of the new law, inform potential investors, and connect the two much like the crowdfunding websites already do.

"The last thing we want is for this to be used badly, for people to start off with false starts," said Pearl. "We’ve sort of taken this on and said we’re going to make an effort to make the entire state ready. "

While many of the other states crowdfunding investment laws have been slow to inform investors of opportunities, the Oregon coalition plans to host launch parties throughout the state about the new laws. The first will be in Portland on Jan. 22.

Though Hatch Oregon is one group that's mobilizing, Pearl said it's not alone. Once the laws go into effect, any small business owner can take advantage of crowdfunding investments, and she hopes they do.

Copyright 2015 Oregon Public Broadcasting