Skip to Content

A Kickstart to Business: Florida Joins Other States in Passing Intrastate Crowdfunding Exemption

Oranges and Money

The local charitable campaign that raised funds for new team uniforms is moving to the boardroom as Florida joins more than 20 other states that have passed legislation or enacted regulations permitting some form of intrastate crowdfunding. The legislation becomes effective October 1, 2015.  Here are some highlights.

Crowdfunding is an Internet-based form of collaborative funding, usually raising small amounts of money from a large number of people.

Under the new law (Laws of Florida, Ch. 2015-171), which is tied to the federal exemption for intrastate offerings, an issuer may use intrastate crowdfunding if it:

  1. is a for-profit business entity formed in Florida,
  2. is registered with the Florida Secretary of State,
  3. maintains its principal place of business in Florida, and
  4. derives its revenues primarily from operations in Florida.

Additionally, the issuer must conduct the transactions for the offering through a dealer registered with the Office of Financial Regulation of the Financial Services Commission or an intermediary registered under Section 517.12(20) of the Florida Statutes.  The intermediary will be required to obtain information from potential investors to confirm that they are Florida residents.

Other requirements under the new law pertain to the funds raised.  In particular, there must be a stated investment goal for the funds, and they must be escrowed with a federally-insured financial institution authorized to do business in Florida. The escrowing requirement ensures that proceeds are not distributed to the issuer until the aggregate capital raised from all investors is equal to or greater than the target offering amount. If the offering amount is not reached by the target date, the investors receive a full return of their investment commitment.

Beyond various notice and form requirements, the law places a cap on the amount of funds that can be raised through the crowdfunding exemption. Specifically, “the sum of all cash and other consideration received for sales of a security under this section may not exceed $1 million, less the aggregate amount received for all sales of securities by the issuer within the 12 months preceding the first offer or sale made in reliance upon this exemption.” In other words, significant funds may be raised through this exemption, but limits exist on its use at certain dollar amounts.

Notwithstanding this limitation, Florida’s crowdfunding statute may provide a new resource to developing business entities and homegrown products that rely on and seek the support of a loyal customer base. Only time will tell whether the success crowdfunding has brought to everything from local charities to the revival of a canceled television series,[1] will be replicated in the business sector. Regardless, Florida’s new law is a positive first step to releasing crowdfunding’s potential at a local level.


[1] David Itzkoff, ‘Veronica Mars’ Fans Are Happy to Finance a Reunion, N.Y Times, Mar. 5, 2014.

©2024 Carlton Fields, P.A. Carlton Fields practices law in California through Carlton Fields, LLP. Carlton Fields publications should not be construed as legal advice on any specific facts or circumstances. The contents are intended for general information and educational purposes only, and should not be relied on as if it were advice about a particular fact situation. The distribution of this publication is not intended to create, and receipt of it does not constitute, an attorney-client relationship with Carlton Fields. This publication may not be quoted or referred to in any other publication or proceeding without the prior written consent of the firm, to be given or withheld at our discretion. To request reprint permission for any of our publications, please use our Contact Us form via the link below. The views set forth herein are the personal views of the author and do not necessarily reflect those of the firm. This site may contain hypertext links to information created and maintained by other entities. Carlton Fields does not control or guarantee the accuracy or completeness of this outside information, nor is the inclusion of a link to be intended as an endorsement of those outside sites.


The information on this website is presented as a service for our clients and Internet users and is not intended to be legal advice, nor should you consider it as such. Although we welcome your inquiries, please keep in mind that merely contacting us will not establish an attorney-client relationship between us. Consequently, you should not convey any confidential information to us until a formal attorney-client relationship has been established. Please remember that electronic correspondence on the internet is not secure and that you should not include sensitive or confidential information in messages. With that in mind, we look forward to hearing from you.