Forget the next movie, now you can crowdfund Texas oil wells

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(Reuters) – Would be wildcatters and investors hoping to strike it rich in oil can now turn to crowdsourcing, a way to raise money more synonymous with aspiring filmmakers than roustabouts in West Texas.

Equity crowdfunding, or raising capital directly from a large group of investors, is widely used for projects from technology to fashion. Now, at least two small Texas firms are testing the concept in the oil and gas industry.

Potential prospectors, hoping to tap into smaller projects that big banks would normally pass over, are taking advantage of recent federal legislation that allows crowdfunding by for-profit companies.

EnergyFunders, a tiny 6-person firm in Houston, has signed up 800 investors since its unofficial launch in July, around the time crude prices started a 50 percent slide over the next six months.

“This allows small oil and gas operators to get funds when large institutional investors are turning away from the industry,” said Philip Racusin,¬†chief executive officer of EnergyFunders.

Its system, like that of another Texas-based startup, CrudeFunders, is web based. To read full article, click

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