DALLAS—Texas plans to introduce intra-state Crowdfunding withinthe next couple of months. If you thought Texas would follow thelead of Georgia and other states, you're in for a surprise. That isaccording to Mark Roderick, a crowdfundingattorney at Flaster/Greenberg PC.

In fact, according to a recent blog post by the attorney, manyof the things being done in Crowdfunding around the country will beprohibited in Texas:

• An entrepreneur looking to raise money under the Texasintra-state rules will not be allowed to do it himself. Instead,all Texas Crowdfunding must go through a Texas broker/dealer or aregistered Texas Crowdfunding portal.
• In the Crowdfunding industry today, from FundersClub toRealtyMogul to Fundrise, it's typical for the portal or itsaffiliate to take an interest in the issuer, i.e., a “carriedinterest” or a “promote”. Not in Texas, where the portal may notreceive or hold any financial interest in the issuer.
• In the Crowdfunding industry today, third party services likebancbox typically serve as escrow agents. Not in Texas, where aTexas depository institution (e.g., a real bank) must hold theinitial escrow.
• In the typical Crowdfunded debt transaction, exemplified byPatch of Land or RealtyMogul, the portal or an affiliate lends themoney to the ultimate borrower and then borrows money from thecrowd. Not in Texas, because technically the portal or itsaffiliate is then the issuer, which is prohibited.

To learn more about some of these hurdles, and theTexas-specific workarounds, contact Roderick by going to theoriginal blog posting here.