Rural Crowdfunding

Abstract

One reason that economic development in rural America lags behind its urban counterpart is the persistent lack of venture capital for rural entrepreneurs. Geography deserves much of the blame, as angel investors and venture capitalists tend to live and work in metropolitan areas on the coasts, in places like Silicon Valley and Boston. Many rural areas are literally thousands of miles away, with the result that venture capital has rarely found its way to rural regions.

Recent federal legislation, however, has the potential to change this dynamic. The JOBS Act authorizes the sale of securities over the Internet to large numbers of investors, each of whom only invests a small dollar amount. This “crowdfunding” of securities is a promising means for rural entrepreneurs, as well as farmers and others, to access venture and business capital.

Keywords: Crowdfunding, Rural, Farming, Securities, JOBS Act, CROWDFUND Act, Financing, Startup

JEL Classification: K00, K2, K20, K22, K23, O16, O3, O38, O40