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Opportunities to Raise Capital in Oregon

Two Oregon rules open opportunities for Oregon businesses to raise funds for new or expanding projects. The rules create exemptions that allow businesses to raise money with reduced regulation while ensuring investors are protected.

Renewable energy cooperative corporation
Oregon-based cooperative corporations can use an exemption to raise funds for renewable energy projects in Oregon.

The rules allow cooperative corporations set up to develop and operate renewable energy sources to raise funds without going through a full-blown registration process or using a licensed securities salesperson. To use this exemption, the co-op must meet requirements such as:

  • Investors must be part of a community affiliated with the co-op or its project.
  • No more than $1.5 million in funds can be raised by selling to members of "non-accredited" status (i.e., individuals with a net worth of less than $1 million).
  • Although co-ops may promote their mission and goals, the promotion must be limited in nature and each person interested in investing must receive specific disclosures about the risks of the investment.

Link to complete rule:
http://arcweb.sos.state.or.us/pages/rules/oars_400/oar_441/441_025.html (starting with Oregon Administrative Rule (OAR) 441-025-0120)

Raising money through small investments from a large number of investors, known as crowdfunding, can help smaller businesses access capital for new ventures or expansions.

Rules allow Oregon-based companies to raise up to $250,000 from Oregon investors to start new businesses or fund existing operations. Like the renewable energy exemption, this rule allows the sale of these investments without registration or licensing a salesperson.

To use the exemption, the company must meet requirements such as:

  • The company must be registered and doing business in Oregon and the securities can be offered only to Oregon residents.
  • The company can provide limited advertising to Oregonians on the investment, and if an Oregon investor wants to learn more, the company must provide formal disclosures.
  • An investor must receive and review the disclosure documents before an investment decision becomes final.
  • No single investor can invest more than $2,500 in any one investment.

Other methods for raising capital
There are other tools local companies can use to raise capital. They include the Oregon Small Corporate Offering Registration (SCOR) and sales through Rule 506 under Regulation D of the federal securities law. The rules for a SCOR offering can be found at http://arcweb.sos.state.or.us/pages/rules/oars_400/oar_441/441_065.html.

Caution to investors
Investors looking at these opportunities should remember that such investments - including the business plan and financial condition of the company - have not been reviewed by the State of Oregon, or any third party. In addition, such businesses typically have a limited operating history and, therefore, can be more risky than investing in a more established business.

Also, there are typically limitations on when and how such securities can be resold. As such, investors should be prepared to hold these investments indefinitely as there may not be a market for resale, and investors should be able to afford to lose their entire investment if the business or venture fails.

Always consult with a financial advisor before investing in any company to ensure that the investment is suitable for you.

Crowdfunding resources
Adopted rules
Frequently asked questions
Current list of crowdfunding filings
Business technical service providers

More information
Division of Finance and Corporate Securities
Jason Ambers, 503-947-7059, jason.e.ambers@state.or.us