Get Funded

Investment Crowdfunding Is Now Available
For North Carolina Startups and Small Businesses

Investment crowdfunding is now available in North Carolina. Startups and small businesses can use it to raise money to get their company off the ground and help it to grow. We now have our own investment crowdfunding platform called Localstake NC, and the resources in place to help you build an effective campaign. And our new NC PACES Act investment crowdfunding law provides a great new option for raising money from any North Carolina resident.

Here at CrowdfundNC.com you can find the tools and services from the top investment crowdfunding experts in North Carolina to help you get that funding using Regulation D, Regulation CF or North Carolina PACES Act equity or debt offerings.

I am an entrepreneur and I am considering crowdfunding, what should I do?

First, create a viable business model and plan, and get to where you are generating revenue. You don’t have to be profitable yet, but you do need to show traction and that there is demand for your product or service. If you are too early stage, you may want to consider a donation and rewards campaign as an option to get bootstrapped.

Next, educate yourself by studying the educational materials that the crowdfunding sites provide to understand how this works and what you will need to do to have a successful fundraising campaign. For North Carolina businesses, CrowdfundNC.com and Localstake NC are great places to learn.

Next, study the campaigns of other companies that are similar to yours to see what they have done right (and wrong). Then pick a good platform (we like Localstake NC) and legal advisor to work with as you create your offering and prepare to fundraise. Then get ready to work hard to promote your offering and find new investors. Nothing will happen automatically, so be prepared to put in plenty of time to make it happen.

And CREATE YOUR CROWD!

Successful companies will often have a mix of angel and retail investors as they grow. Keep networking, online and offline. Get out to the many educational events and networking events you can find, and make the contacts that you can refer to your crowdfunding offerings once they go live. Build your social network of customers, business partners, friends, supporters and community who want to see you become a success. Then invite them to join you on the journey of creating a successful business. With investment crowdfunding, making that decision will be faster, easier, and more transparent for them (and you) than ever before.

How do businesses get funded on Localstake NC?

Step One: Build a compelling story and offering

On the company profile webpage on Localstake NC, the business will make the case for the funding they need, and explain the investment offering they are making

The investment crowdfunding mission of a startup or small business is to create a great company profile and offering on Localstake NC that explains:
  • The company vision
  • The problem to be solved
  • The product or service solution
  • Identification of the target market and how to reach it
  • A business plan and model that works
  • The team that that can make the business a success
  • The traction the company as achieved
  • The milestones and metrics the company anticipates
  • Use of funds to achieve those milestones
  • An analysis of the competition
  • The existing financial condition of the company
  • A reasonable financial projection going forward
  • The terms and disclosures of the investment offering
Step Two: Create and run an effective campaign

The next step is to run an investment crowdfunding campaign to raise the needed funding. The goal is to find investors in the community and around North Carolina that share your enthusiasm for your business and will help fund it. Localstake NC also provides the broker/dealer investment accounts and the tools to enable investors to invest, and to manage the required disclosures and reporting to investors by the company.


How do I put a profile and offering together?

The first step in putting together a good profile and offering is to do your research on how others have done it. The Indiana version of Localstake.com has many good examples of how this works, including companies with products and services in categories like Retail/Wholesale, Food/Beverage, Business Services, Healthcare/Biotech, Manufacturing, Software/Technology, and more. You can also research some of the many thousands of investment crowdfunding offerings on other platforms. Find the best successful examples of similar companies and market segments, and clone what they have done.

Which exemption should I use? What are the rules?

You can choose an NC PACES exemption, a Reg D 506(b), 506(c), or Regulation Crowdfunding, or Reg A+ exemption, but keep in mind the rules are different for each of the exemptions. Localstake NC, your attorney and advisors can help you understand the requirements of each.

Let’s look at NC PACES as an example.

If you are using an NC PACES offering, you can build a company profile on the Localstake NC platform which is PACES compliant for what is called a North Carolina Paces offering (NCPO).

Another option is to make a website yourself if you prefer to use a smaller offering type called a Local Public Offering (LPO). But if you make your own, your website has to be compliant with the PACES law and the rules on the NC Secretary of State website, so you should get familiar with those too. Read the FAQs first, then the PACES Act rules to get a good idea how this all works.

North Carolina based startups and small businesses that want to raise money using the NC PACES Act crowdfunding law (referred to as issuers of an investment offering) will follow the registration, reporting, escrow management, record keeping, promotion, and procedure rules of the PACES Act on the Secretary of State website. Localstake NC and your attorney will help you stay compliant.

Once your offering filing is approved by state regulators, businesses can start raising money using equity or debt offerings to raise up to $2M if you have reviewed or audited financials, and up to $1M if you do not.

North Carolina accredited angel investors can invest an unlimited amount, and North Carolina unaccredited retail investors can invest up to $5000 per offering.

PACES allows three different sizes of offerings depending on the amount of money you want to raise, and the rules are slightly different for each.
  • Local Public Offering (LPO) – you can raise up to $250k, and promote the offering in a variety of ways including social media, advertising, and events. You do not have to use the internet to promote or list your offering, but if you do you must have a PACES compliant website. You will still need to follow all the PACES rules, except where the LPO rules provide you with a better alternative that override the normal PACES rules. This is a "do-it-yourself" offering that under the current rules cannot use a registered funding platform or broker/dealer to host the offering. You will create and register the offering and submit the offering docs and marketing plan to the NC Securities Division, and meet with them to get the offering approved before you can launch.

  • NC PACES Offering (NCPO, up to $1M, also called the Invest NC Exemption)  – you can raise up to $1M without audited or reviewed financial statements as long as you give investors financial information required by anti-fraud rules. In this case, you must use a PACES compliant crowdfunding platform like Localstake NC, and you cannot publicly promote the offering other than with a limited tombstone type description that links to the offering website. With this type of offering, the platform will provide the tools and assistance to put the offering together, get it registered with the state regulators, manage the offering campaign, and make sure everything is compliant. In many cases this will be easier and more effective for issuers even if they are raising $250K or less.

  • NC PACES Offering (NCPO, up to $2M, also called the Invest NC Exemption) – you can raise up to $2M if you have GAAP compliant financial statements that have been reviewed or audited by a CPA. Your financial statements must cover the longer of 12 months or the period required by GAAP. In this case, you must have a PACES compliant platform, and you cannot publicly promote the offering outside the platform other than with a limited tombstone type description that links to the offering website.
What type of offering should I do?

NC PACES allows equity or debt offerings of various types, and three popular ones for startups and small businesses are revenue share loanspreferred equity, or convertible note offerings. Whichever type you choose, you will need to work with Localstake NC and your attorney to help you put together things like disclosure documents, subscription agreements, term sheets, and the state filing forms you will need to do to set up your offering, get it approved, and make sure you are in compliance with the NC PACES securities law rules.

A key decision here is your goal for how much will you raise, and what is the minimum amount you need that will help your business achieve your objectives. PACES requires that any funds collected from investors to be kept in an escrow account until the minimum amount is reached. PACES requires that the minimum for an NCPO must be at least 20% of your goal and for an LPO at least 25% of your goal. You can read the issuer and escrow account FAQs for more information.

You should also make sure your company meets at least one of the requirements in Rule 147A for using an intrastate exemption. The company must establish that it has a meaningful presence within the state by satisfying at least ONE of the following FOUR “doing business” requirements:

·       80% of its revenues come from within the state, or
·       80% of its assets are located in the state, or
·       80% of the funds raised are to be used to fund operations in the state, or
·       a majority of the company’s employees are based in the state.

If your company does not meet at least one of these requirements, then you will need to use one of the other exemptions like 506c or Regulation Crowdfunding.



To get started with your free fundraising account, please visit

For additional services and resources to help you with your crowdfunding campaign click on the tabs above.

For more information see the links on the right and
email: crowdfundnc@nc.rr.com and support@localstake.com