The D.C. Department of Insurance, Securities and Banking announced today that it has authorized the first District of Columbia investment-based crowdfunding opportunity for D.C. residents.
This action allows Prequel, LLC, a District-based business, to offer and sell $200,000 of “Class B” membership interests to D.C. residents for a minimum purchase of $100 per interest. Funds raised in the offering will be used to establish a restaurant business in the District. Collectively, “Class B” securities holders will own ten percent of the company.
“By providing innovative ways to support local businesses, we can create more jobs, contribute to the growth of our economy and allow D.C. residents to invest in their community,” said Mayor Muriel Bowser.
In October, the department established an exemption from the District’s full securities registration requirements in order to simplify and encourage investing in District-based small businesses. This type of offering is exclusive to District-based businesses and can only be offered and sold to D.C. residents.
“Our goal is to provide a cost-effective alternative for raising capital that both benefits District entrepreneurs and protects local investors,” said Chester A. McPherson, the department’s acting commissioner. “We are pleased that a member of the District business community is using this program to support capital formation and we hope that other businesses will consider it as well to raise money from local investors.”
For more information about the program, visit disb.dc.gov/crowdfunding.