Legislation passes that will allow businesses to find investors through crowdfunding
The law was drafted by Ryan Schildkraut and Zachary Robins, attorneys at Winthrop & Weinstine, and was sponsored by Sen. Terri Bonhoff and Rep. Jen Loon. The new law allows businesses to promote investment opportunities online in a crowdfunding way, when previously businesses were restricted in who they could share fundraising efforts with, essentially limiting their options to accredited investors.
“MNvest will encourage free enterprise, expand small businesses, create jobs and increase the tax base. The new legislation allows anyone with a growing business to raise capital with support from the community,” said Schildkraut in a recent statement. “Everyone wants their local businesses and entrepreneurs to succeed. We’re excited that, through crowdfunding, any Minnesotan can finally become an investor and have a direct stake in the next generation of great Minnesota companies.”
About 20 other states already allow equity crowdfunding, including Wisconsin, Michigan and Indiana. The final hurdle for MNvest will come as the Department of Commerce develops the rules to govern the legislation.
“We’re proud of the entrepreneurial spirit embodied in Ryan and Zach,” said Scott Dongoske, Firm President at Winthrop & Weinstine, in a statement. “They recognized a need and took the initiative to modernize archaic laws from the 1930s and create legislation that Minnesota needs today. It’s been fascinating to have been a part of MNvest’s journey that started less than a year ago – and is now coming to fruition to benefit businesses throughout Minnesota.”