As of June 20, 2016, Minnesota businesses may use crowdfunding to find investors and raise capital. The new law MNvest provides a limited exemption from federal and state security laws, making small business investments more accessible to a greater number of investors and investees.
Several qualifications must be met under the new law:
- The business must be an entity formed under Minnesota law, and have their principal office located in the state. Additionally, at least 80% of an entity's assets and income must be located/earned in Minnesota.
- The investor must be a Minnesota resident, and can invest a maximum of $10,000 in any given offer through MNvest.
- This limit does not apply to accredited investors.
- The transaction must be conducted via a 'MNvest portal', which is registered with the Minnesota Commerce department. A prospective business must complete a notice filing and pay the $300 fee associated.
- A business can receive a maximum of $2 million in a 12-month period if a certified public accountant has audited or reviewed the company financial statements.
- A business can receive a maximum of $1 million in a 12-month period if no audit or review has been conducted.
For more information, visit mnvest.org.
