A year after the MNvest legislation was signed into law, the new crowdsourcing method to give investors and startups fresh options for funding
It’s been a little over a year since the Minnesota Legislature passed the groundbreaking MNvest legislation, which was signed by Gov. Mark Dayton. The new law was established to allow Minnesota citizens to use online crowdfunding platforms to invest up to $10,000 in Minnesota-based small businesses.
For the past 13 months, the Minnesota Commerce Dept. has been working to hammer out the rules and regulations that will govern this innovative method to implement intrastate crowdsourcing.
Now the Commerce Dept. has completed its rule-making work. As required by law, MNvest rules will be published in the register of the Office of the Revisor of Statutes on June 13, and will officially go on the books on June 20.
“The Internet streamlines the process of bringing together small businesses and investors,” says Ross Corson, spokesman for the Commerce Dept. “The MNvest legislation is designed to expand opportunities for entrepreneurs and startups to raise investment capital through this type of equity fund raising.”
Under the MNvest guidelines to be implemented by the Commerce Dept., for the first time companies will be able to publicly offer securities investments through the use of registered funding portals.
In the past, such investments were only available to high net worth individuals who are accredited investors.
MNvest crowdsourcing is exclusively for Minnesota investors who want to fund Minnesota companies.
“Of course, there are risks for prospective investors that they should consider, as well as looking at the potential upside of the investment,” Corson says. “The fact that the investment portals have to be registered with the state does provide a layer of protection for the consumer, although it’s not foolproof.”
Corson says that when the MNvest law takes effect on June 20, the Commerce Department’s website will have extensive information for both investors and companies seeking to use the registered portals to crowdsource funds.