DENVER (CBS4)– A proposal at the state Capitol would allow startups to use crowdfunding to sell stock to average Coloradans.
Crowdfunding is a popular way for startups to raise awareness about their business or organization. It’s not a place to raise a lot of money because those startups can only give promotional products to supporters like a T-shirt.READ MORE: Denver Tied 126-Year-Old Record High Saturday, Lands In Top 5 For 90 Degree Days
Under the proposal those startups could give away stock in the company as a return on their investment.
“We sought out to develop a platform that would connect providers of any type of professional service, whether you’re a surf instructor, a ski instructor, tutor, piano instructor, with consumers in an on-demand basis,” said Utivity creator Matt Shifrin.
“I can go through and search either by people’s availability, or their rating score.”
When Shifrin first thought of the idea behind Utivity, he knew he had a great concept. It’s an online site for almost any service where providers’ certifications, accreditations and backgrounds are vetted and posted. What he didn’t have was capitol.
“It was daunting, a huge undertaking and the biggest component of that is we knew we had to raise money,” said Shifrin.READ MORE: Police, Firefighters, Rescue Teams Continue Search For Diana Brown, Missing Flash Floods Ripped Through Poudre Canyon
He traveled the country, giving presentations over six months, 22 states and 74 investors.
“It was incredibly difficult,” said Shifrin.
A bill proposed at the state Capitol would make it easier. Representatives Dan Pabon and Pete Lee are behind the bill that would allow Colorado companies to offer stock on crowdfunding sites to any Coloradan.
Right now only accredited investors with $1 million net worth can buy stock in a private company.
“We have entrepreneurs on steroids right now in Colorado. People are coming in because our economy is burgeoning and this bill basically allows investors to invest in Colorado companies to keep them growing and thriving and building the economy even more,” said Pabon.
For entrepreneurs like Shifrin it not only means a bigger pool of investors but also a powerful marketing force.MORE NEWS: Woman Killed While Crossing Broadway, Search Continues For Hit-And-Run Suspect Driver
“They’re going to take the time to push it out there to their friends and their family,” said Shifrin. “You know when you have the right support of the community, you know, it’s ultimately what it takes to see success for something like this.”