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Frequently Asked Questions About Using Oregon’s Intrastate Offering (aka, “Crowdfunding”) Exemption Jan. 23, 2015

UPDATED January 8, 2018

These FAQs are meant to help answer questions that the Division of Financial Regulation (the “Division”) regularly receives about Oregon’s Intrastate Offering (“OIO”) Exemption (crowdfunding). They are not meant to be relied upon as legal advice (see “Can the Division help me with my offering” section below for why).

The exemption was designed to allow most Oregon small businesses to participate in crowdfunded securities offerings. Your business may qualify to use Oregon’s crowdfunding exemption if all of the following apply:

  • It has an active registration with the Oregon Secretary of State and has 50 or fewer employees;
  • Its principal place of business is in Oregon;
  • It only offers and sells stocks (equity in a business), notes (secured debt), and debentures (unsecured debt).

The exemption is not available for any of the following:

  • Blank check companies (i.e., development stage companies with no specific business plan or purpose);
  • Companies that are involved in petroleum exploration or production, mining, or any other extractive industries; or
  • Investment companies under Section 4 of the Investment Company Act of 1940.

These types of companies are more speculative and carry higher risks to investors and, therefore, require a higher level of review by regulators.


Your business must meet the requirements above and those detailed in the Oregon Administrative Rules . To use the exemption, you will need to take the following steps:

  • Meet in person with a business technical service provider (“BTSP”) to review your business plan;
  • File a notice with the Division at least fifteen (15) days before advertising, offering, or selling any security. The notice must include a copy of the business’s disclosures and advertising materials. It must also include specific information about the business, and its owners and officers. See Oregon Administrative Rule Section 441-035-0110 for the specific information needed.
  • Offer and sell the securities in accordance with the requirements under Section 3(a)(11) of the Securities Act of 1933; or
  • Offer and sell the securities in accordance with the requirements under SEC Rule 147A.

The Division has a form available that you can fill out and file with the Division for the initial notice, amendments, and extension requests. The Division may waive particular requirements if it finds that the waiver wouldn’t lessen the protections established by the rules. See the “what can be waived?” section below.


No. This exemption is available only if you meet all of its requirements. Failure to comply with all of the rules could result in a finding by the Division that you sold unregistered securities. Penalties could be as high as $20,000 per violation and result in you being unable to use the crowdfunding exemption (or other exemptions from securities registration) in the future. You may also be required to refund any sales made in reliance on the exemption.

The sale of unregistered securities can also result in sanctions by other criminal, state, or federal agencies, or in an investor lawsuit.

Remember, in a court case, you have the burden of proving that you met all of the exemption’s requirements. We urge you to keep detailed records related to any transactions under these rules.


You need to disclose all material information prior to the sale of any security. In the most general sense, information is considered material if it would likely alter the “total mix” of information available to a reasonable investor. If it could impact a prospective investor’s investment decision, it is most likely “material information” and should be disclosed.

The rules require that specific information be included in the offering documents, including any factors that make an investment in your business speculative or risky. While no one wants to think (and tell prospective investors) about the downside of the investment decision, disclosing risk factors can protect your business at the same time it protects investors. Well-thought-out risk factors can protect you against later claims by investors that they were not informed of the risks of the investment. (And, investors, be sure you read and understand the risks of your investment). Well-thought-out risk factors will avoid generalized statements; they will be specific to your business. Sample risk factors could include:

  • Your lack of an operating history;
  • Your lack of profitable operations in recent periods;
  • Your financial position;
  • Your business or proposed business is highly regulated;
  • The lack of a market for your common equity securities or securities convertible into or exercisable for common equity securities;
  • That offerings may last a total of 24 months.
  • There is no current market for the securities, and they can only be transferred under specific circumstances, so an investor may never be able to sell the securities.
  • You have never managed a business before and so your management and business decision-making are untested and may affect the business’s profitability or even survival.
  • You have managed a business before but it failed, and this business may also fail.
  • The business is highly dependent on the weather and a drought or heatwave may devastate your crops, causing you to be unable to pay back your obligations.
  • The business is a sole proprietorship or dependent on a few key employees. If something happens to the sole proprietor or the employees, the business may not be able to continue its operations.
  • You are offering a note, but you are not setting money aside (a “sinking fund”) to pay back the note. Because you are not setting aside money, you may not be able to pay the note and promised interest when it matures.
  • Your business model is to manufacture and sell a niche product. You have never seen the idea anywhere else, so you are not sure how broad the niche is. There may not be a ready market for your product.

You can find other examples of risk factors in Appendix A to the NASAA Small Corporate Offering Manual at,

Businesses can raise up to $250,000 per offering. Businesses are limited to raising a total of $500,000 under the crowdfunding exemption over the life of the business. Businesses cannot accept more than $2,500 from any one individual, unless the individual can demonstrate that they earn more than $100,0000 a year, have earned at least that much over the previous 2 years AND whose net worth is at least $200,000 excluding the value of their primary residence. If a prospective investor can demonstrate they meet the income and net worth requirements, then they can invest up to $10,000.

Be careful if you will need to raise additional capital for your business at the same time (or shortly before or after) conducting a crowdfunding offering. For example, let’s say your business needs $2.5 million in operating funds and intends to raise 10 percent of that amount through a crowdfunding offering. Offers and sales of the remaining 90 percent would likely be considered part of the same offering, thus eliminating the ability to use the exemption . Factors that will be considered when evaluating parallel offers include:

  • Sales are part of a single plan of financing;
  • Sales involve the issuance of the same type of security;
  • Sales are made at or about the same time; and
  • Sales were made for the same general purpose.

Generally, sales of securities made more than six months before or after sales under the crowdfunding rules will not be considered to be made under the crowdfunding rules.

While other exemptions may be available, each has its own requirements and you will need to comply with all the requirements of whatever path you choose. If you have questions about whether multiple paths of financing may be considered a single offering, you should consult a lawyer.

There are a number of ways for small Oregon businesses to raise money through the offer or sale of securities. Other methods have different, or no, total offering caps, individual investor limits, or restrictions on general advertising or solicitation, and might be more suitable for your business. You should carefully consider how much funding you need for a specific product or expansion and whether this exemption is the most suitable for your needs – short term and long-term.

Also remember that if you are trying to raise money through equity shares, you are selling ownership and control of your business. If you are offering a note or a debenture, you are committing to pay back the money with interest and under specific terms.


BTSPs are organizations that have been specifically organized to provide assistance to small businesses. The Division has automatically approved the small business development centers and the economic development districts to act as BTSPs. A listing of small business development centers can be found at: .

Oregon economic development districts can be found at .

In addition, other nonprofit accelerators and incubators may apply to be BTSPs. So far, the Division has only approved a few of these entities to act as a BTSP.

Because the BTSPs mission is to provide assistance to small businesses, the Division anticipates that BTSPs will provide guidance regarding business plans and other information they need to succeed. A BTSP is typically not a lawyer, securities broker-dealer, investment adviser, or an expert in securities law. It cannot give advice regarding the securities offering (unless it is specifically licensed to do so).

Keep in mind that the rules require any business wanting to use the crowdfunding exemption to certify that a person responsible for the business has met with a BTSP and that the BTSP has reviewed its business plan.


No. The Division of Finance and Corporate Securities can provide general interpretations of the rules, but is prohibited from offering specific legal or investment advice. Securities can be tricky; if you have questions, your best option is to seek the advice of a lawyer.

You can send specific questions to the Division about whether, and how, parts of the rule would apply to your business. We can answer questions about whether a specific rule, or provisions that we administer, applies to your specific business, but we cannot give legal advice or help with preparing a crowdfunding offering.

[Updated March 24, 2015]

Yes, OAR 441-035-0240 lists out particular requirements that the Division may waive if you send in a request and explain how a waiver will not weaken the investor protection provided by the rules. For example, if your business has 25 employees except during the harvest or processing season (when you have more than 50) the Division may waive the employee threshold. Maybe you have an established business, you might request a waiver from the requirement that you meet with a business technical service provider. The Division will review your request and determine whether a waiver is appropriate.

Securities are regulated at the federal level as well as by the states, so when selling securities you need to be aware of both state and federal laws. Like Oregon securities law, federal securities law requires most investment securities to be registered before they can be offered or sold. And, like Oregon law, the federal securities law creates certain exemptions from registration if the issuer follows all the terms of the exemption.

Section 3(a)(11) of the Securities Act of 1933 is an exemption to the securities registration requirements under the federal securities law for securities offered or sold only within a state to residents of that state (i.e., an “intrastate” offering). This is why the crowdfunding exemption in Oregon is only available to Oregon residents. The Securities and Exchange Commission (“SEC”) adopted Rule 147, which provides a non-exclusive safe harbor under Section 3(a)(11).

Until recently Section 3(a)(11) was the intrastate exemption from securities registration. In June of 2017 the SEC adopted a new rule: 147A. The SEC found that that the intrastate exemption needed to be modernized, but that Section 3(a)(11) didn’t provide the leeway necessary to address modern communications tools. The SEC adopted Rule 147A under its general authority to create exemptions. In July 2017, the Division adopted rules to allow businesses to use the new 147A for the Oregon Intrastate Offering exemption. This opened up the ability to advertise – but not sell- OIO securities to non-Oregonians. Businesses are still required to be residents of Oregon, but 147A expanded what Oregon residency means.

Under Rule 147A, an Oregon business is a “resident and doing business” in Oregon if one of the following apply:

    Principal place of business is determined by meeting one of the following:

  • The business derived at least 80% of its consolidated gross revenues from the operation of a business located in or from the rendering of services within Oregon; or
  • The business had at the end of its most recent semi-annual fiscal period, at least 80% of its assets and those of its subsidiaries on a consolidated basis located within Oregon; or
  • The issuer intends to use and uses at least 80% of the net proceeds from sales made pursuant to the OIO in connection with the operation of a business, the purchase of real property located in, or the rendering of services within Oregon; or
  • A majority of the business’s employees are based in Oregon.

Oregon’s Intrastate Offering Exemption was designed to promote compliance with the federal Securities Act and 147A. Because of the federal requirements, strict compliance with the state rules is important.


Advertising under the rules is limited to no more than the following information:

  • The name and contact information for the issuer.
  • A brief description of the general type of business of the issuer.
  • Whether the securities being offered are stock, notes, debentures, or a combination.
  • The total offering amount.
  • A brief description of how the issuer will use the funds.
  • The duration of the crowdfunding offering and the funding deadline.
  • The issuer’s logo.
  • A link to the issuer’s website or third-party platform on which the securities will be offered or sold and the required disclosures made available.

Keep in mind that the definition of “offer” under the federal and Oregon securities law is broad. Offers can include statements meant to “condition the public mind” or “arouse public interest in” a securities offering. In other words, promoting investment in your business while you have an active crowdfunding offering needs to be done carefully. It can subject you to the advertising rules, even if you don’t think you are expressly “offering” your securities. Recent changes to federal securities rules and the Oregon Intrastate Offering exemption remove some of the restrictions on “offering” securities. But you need to be careful to only sell to Oregon residents.

It depends. Aperson is generally considered a resident of Oregon if the place they live most of the time is in Oregon. Because the federal Securities and Exchange Commission (SEC) drafted Rule 147A, we defer to the interpretations the SEC provides. While the SEC’s new rule, 147A differs in how to determine a business’s residency, the determination of a prospective investor’s residency hasn’t changed. In 2009, the SEC addressed residency this way:

“Question: May an issuer rely on Rule 147 to offer or sell securities within a single state to a person whose principal residence is in such state but who resides temporarily out of the state?

Answer: Yes.”

For the purposes of the crowdfunding exemption, a person doesn’t need to have been born in Oregon (or even the U.S.) or spend 100 percent of their time in Oregon in order to be residing in Oregon.


Be aware of the advertising rules. The rules limit what types of information can be communicated without providing the prospectus. When the SEC adopted Rule 147A, they specifically considered the use of social media and the internet for advertising – or “offering” intrastate securities. Oregon’s amendment of its OIO rules means that businesses may advertise their securities in media outlets that will cross state lines.

Talking about your business’s past or even current products and services is usually not enough to be considered an “offer.” However, “forward looking statements,” such as talking about future development, product lines, or long-range plans, would likely be considered an offer to sell securities, because these types of statements are not based on past facts but represent an idealized picture of the business in the future - a future meant to attract investment. When you talk about raising money for your business – including how much you want to raise, why you want to raise it, what you plan to do with the money, or how much you have already raised – that begins to look like an offer of a security. Because Rule 147A is primarily concerned with the sale of securities to residents of the state it doesn’t limit the advertisement of intrastate securities to Oregonians.

Remember, it is up to you to prove that you complied with an exemption. If you don’t have an exemption, you must register your securities.

There are a number of options for selling crowdfunded securities over the Internet (you can also sell your securities in person). An issuer can use its own website to sell its own securities under the exemption or it can use a third-party licensed money transmitter to accept payment. While a BTSP cannot handle investor funds (unless it is a licensed money transmitter), a BTSP can redirect investor funds through a licensed money transmitter.

The rules require that issuers of crowdfunded securities have a reasonable basis for believing that a purchaser is an Oregon resident. If you use the Internet to sell your securities, you will need to be able to accommodate investors uploading or otherwise sending you documentation demonstrating that they are Oregon residents before a sale takes place.

Remember, if you accept payment or collect personal information over the Internet, you have a duty to take steps to make sure the information is kept private and secure.