Has anyone filed an NC PACES Act (Crowdfunding) offering?

Question

I am preparing to submit my first NC PACES Act (Crowdfunding) offering and am curious if anyone has used this method for raising money. If you aren't sure how NC crowdfunding works, the NC secretary of State has FAQs and Forms for Issuers and Investors.

While I can't provide details yet, I plan to use the Local Public Offering (LPO) as defined by the Final Adopted NC PACES Act Rules.

Just a sidebar, the offering that I plan to submit is not directly related to real estate investing. There is real estate involved, but its not the primary investment motivator.

Chris Martin · Answer

I know a guy at New Republic, so sent him an email. This isn't in their wheelhouse so they don't have a service like the laws specify. For me, the bottom line is that the NC crowdfunding business is too small for banks to consider. Not one of the banks I've talked to (5 now) knew anything about the NCGS/NCAC rules or even the concept. I'll try Roxboro Savings if you can PM me a contact....

I may just use a funding portal like NC localstake (https://nc.localstake.com/) since they already have an Indiana based bank that performs the escrow function and the NC rules do not require a NC-based bank. I just hate paying the recurring fees if I can avoid it.

Christopher K. · Answer

@Chris Martin Have you tried New Republic Savings Bank or Roxboro Savings Bank? I have found these smaller, regional banks can be more open to development and investment backing than the bigger names.

If you're looking for individual contact names/#'s, PM me and I can send you some.

Chris Martin · Answer

I will post as I find out more about the process.

For those interested, I am using the Small Company Offering Registration ("SCOR") form U-7 as the main disclosure document, rather than the S-1 or federal crowdfunding document series that companies use as the basis of a 'prospectus' for federal (SEC) filing. The best description I've found for, and argument for using, the SCOR document is from the Washington State Department of Financial Institutions.

Obviously I will be filing in NC but Form U-7 works for any state. The toughest part I am having currently is finding a financial institution to act as an Escrow Agent or Impound Agent (SCOR U-7 question 75). I'd prefer to use a bank over an attorney firm. Plain and simple, seems like NC Banks are just not set up to handle (implement) the NC PACES Act.

Christopher K. · Answer

@Chris Martin I have not but I've been interested in this for a little while. Please keep us posted with how things unfold.