Recent Developments of Michigan Intrastate Crowdfunding

By Irene Tordera,

In the last couple of years , while waiting for Title III to be eventually released by the SEC, several US states adopted intrastate crowdfunding laws, which allow companies to raise capital through local securities crowdfunding portals. Among them there is Michigan, whose securities crowdfunding exemption allows resident issuers to offer securities only to local  investors, like it also happens in other states.

The Michigan Invests Locally Exemption (MILE), was signed by Michigan governor last December. The exemption permits an issuer to sell securities to non-accredited investors and utilize general solicitation if specific requirements are satisfied. In particular, the requirements include the following:

  • Both the issuer and the investors shall be resident in Michigan.
  • The total amount raised by the issuer cannot exceed $1 million (or $2 million if the issuer has audited financial statements).
  • Non accredited investors cannot invest more than $10,000 in a single offer.
  • The issuer has to provide investors with a disclosure statement reporting information about the business, the offer and its risks.

flagge-michigan While MILE currently does not differ significantly from other states’ crowdfunding exemptions, a law, which has been recently proposed, may change securities crowdfunding in Michigan, putting it in the forefront of the intrastate crowdfunding movement. In fact, Michigan is currently evaluating whether to create Michigan investment markets, that is secondary markets for the resale of securities purchased under MILE. In particular, the transactions taking place in these secondary markets would be handled by broker-dealers without registering under Federal regulations, but only with Michigan state. All the transactions in secondary markets would need to take place between Michigan resident and the related fees cannot exceed 5% of the transaction value. Providing an exit to investments, the creation of secondary markets may indeed foster Michigan intrastate crowdfunding, pushing more investors to give it a try. The law is still in a proposal phase, however if it will ever get signed Michigan would be the first US state to have a secondary market for securities crowdfunding. This innovation would of course bring in new challenges and issues to deal with, for instance how logistically Michigan investment markets would work. Also it is not to underestimate the following question: is a single state like Michigan able to generate a volume of intrastate securities large enough to justify the presence of a secondary market? ReferencesFranks, W.H. (2014). The state of crowdfunding in Michigan. Grand Rapid Business Journal. Ortel, N.M. (2014). Michigan Intrastate Crowdfunding and More. Foster Swift. Image credit: Jason Carpenter

Tags: , ,


ForbesHow Crowdfunding Can Supercharge Your Campaign In 2016ForbesThey say that there are about 7.45 billion people living in this world right now. Imagine that if you could get each of these seven-and-a-half billion people to contribute one cent to your project, well, you know what I [...]

ForbesHow Crowdfunding Can Supercharge Your Campaign In 2016ForbesCrowdfunding has helped a lot of businesses recently. Want to join the queue? Here's how to raise funds for your projects.and more » [...]

San Antonio CurrentSan Antonio Cat Cafe Launched 20K Crowdfunding CampaignSan Antonio CurrentAs Austin's Blue Cat Cafe turned one (and dealt with some gnarly vandalization), San Antonio's Cat Cafe launched a GoFundMe crowdfunding campaign to help open its doors. Casey Steuar [...]

BillboardCrowdfunding for His Life: How GoFundMe Helped Save a Punk Legend's LifeBillboardSo on the advice of a close friend, Julian -- like an increasing number of aging musicians without a lucrative record contract -- turned to crowdfunding, launching a campaign on the No. 1 pl [...]

Minneapolis Star TribuneSEC releases new, relaxed rules on investment crowdfundingMinneapolis Star TribuneNew rules announced this week will make it easier for small companies to raise capital from small-time investors, another step forward for Minnesota's fledgling investment cr [...]

The GuardianCrowdfunding: the new buzzword for academics needing research moneyThe GuardianArchaeologist Dr David Petts, from Durham University, has also used crowdfunding, raising almost £25,000 to fund a project on Lindisfarne, off the Northumberland coast. The dig, in June, led to [...]

How Crowdfunding Has Changed the Startup GameSingularity HubCrowdfunding has become a multi-billion-dollar industry, funneling millions of dollars into thousands of projects. Technology in particular is one of the leading categories on popular fundraising platforms like Kickstarter an [...]

The RecorderFTC Hears From Company Leaders as Crowdfunding GrowsThe RecorderSACRAMENTO — The future of crowdfunding is one of specialization, with an ever-increasing number of firms finding niches in equity, nonprofit and even creative projects silos, industry leaders told a Federal T [...]

Crowdfunding in commercial real estateJournal Record (subscription)jdavidchapman In 1997, a British rock band funded a reunion tour through online donations from its fans. This may have been the first example of a concept now known as crowdfunding. The crowdfunding industry has quickl [...]

Crowdfund InsiderWhen It Comes to Retail Crowdfunding, SAFEty FirstCrowdfund InsiderOn September 22nd, Crowdfund Insider published a post summarizing the arguments presented in our new essay entitled “Crowdfunding and the Not-So-Safe SAFE“ (forthcoming in Virginia Law Review Online). [...]

CFB Finance

Press Release

CrowdFund Beat News

Hello @CrowdFundBeat's 17363 followers - thank you so much for following! Wishing you all a happy Thursday! >>

Live Crowdfunding .tv

What's Next Step in Regulation A+ JOBS ACTS Title IIII :L Interview : Steve Cinelli with Brian Korn Securities and Crowdfunding/Peer-to-Peer Lending Lawyer, Watch more video library | Conference | Interview | Campaign Showcase | Research | Education |