FAQ

MNvest.org is a nonprofit 501(c)(4) organization which advocated for the passage of the MNvest law. We operate the website, MNvest.org, as an educational resource to inform prospective investors, issuers, portal operators, and service providers catering to the investment crowdfunding industry.

In short, MN-based companies (known as Issuers) post their investment Offerings on web “Portals” registered with the Minnesota Department of Commerce.  Portals will vet and ultimately host select “Offerings” on their websites.  Prospective investors will then review Offering documents and if interested may proceed to the investment stage. Funds will be held in escrow until the Issuer has reached the minimum Offering amount and is able to hold a “Closing.”

MNvest allows you to support small and growing businesses statewide by becoming an investor.

By investing locally you can support family, friends, neighbors, or even strangers, and in doing so help establish vibrant local economies, ensuring businesses have the capital to expand and thrive.

You can lose your entire investment.

$10,000 for non-accredited investors.

An unlimited amount if you qualify as an accredited investor.

According to the SEC, an accredited investor is an individual whose annual income for the last two years was more than $200,000 – or $300,000 if you and your spouse combine your income.  You may also be considered an accredited investor if you have a net worth of at least one million US dollars, not including the value of your primary residence.

The full definition of an accredited investor can be found here.

Up to $2,000,000 with audited & reviewed financial statements. Up to $1,000,000 with internally prepared financial statements.

Following is a summary. The full content of the law can be found here.

• MNvest is only available to entities with their principal office located in Minnesota.
• Issuers shall be deemed to have their principal place of business in Minnesota if the officers, partners, or managers of the issuer primarily direct, control, and coordinate the activities of the Issuer from within Minnesota
• Issuers shall be deemed to be doing business within Minnesota if the Issuer satisfies at least one of the following requirements:
  • At least 80% of the entity’s assets must be located in Minnesota
  • At least 80% of the entity’s gross revenues from the operation of a business must be in Minnesota
  • At least 80% of the net proceeds of the offering are used in Minnesota
  • A majority of the Issuer’s employees are based in Minnesota
• Issuer cannot engaged in the business of:
  • investing, reinvesting, owning, holding, or trading in securities
  • oil exploration or production, mining activities, or other “extractive industries”
  • investments in digital or crypto currencies (like bitcoin);
  • offerings involving investment companies; and
  • offerings by “blank check companies”

Portal operators must be registered with the Minnesota Department of Commerce, meet stringent record-keeping requirements, and provide the state with real-time access to the Portal, among other requirements.

Additionally, Issuers must provide detailed disclosure documents to the state and prospective investors.

There is no minimum investment amount required by the law. However, Issuers conducting an offering are free to set a minimum investment threshold that they deem reasonable for the size of the offering.

Yes.

No.

MNvest.org cannot offer investment advice.

While this is by no means an exhaustive explanation, a key factor to keep in mind is how much experience management of the business has in the industry or sector they’re working in. Think about whether the idea for the business is viable – just because it sounds unique doesn’t necessarily mean it’s likely to succeed.

Are the products or services something you would buy? Your friends or family? Do some background research into the industry and find out how well this type of idea has done in other markets. Study the company’s financials, management, structure, and other legal documents provided in their prospectus so you can learn as much as possible before making your investment decision.

When you invest in an offering, your funds will be held in a bank account at a financial institution until the offering meets its minimum funding target and closes upon the funds held in escrow. If the target is not reached, your money will be returned to you in full.

An Offering may last no more than 12 months.

While each Offering will specify expected returns, you may see little return on your investment, and there is a possibility you may lose your entire investment. Investing is risky and there are no guarantees.

You will be able to retain your investment if you move out of state.

Your investment securities will be “restricted,” which means there are substantial limitations on resale, especially within the first year of ownership.  These investments are not “liquid” so there is no present market to sell your securities. Additionally, the Issuers of the securities (the Companies you invest in) may have additional restrictions on transfer, such as board approval requirements or first rights of refusal to purchase your securities.  Please read all Offering documents to understand restrictions on transfer of your securities.

Why yes! We have a monthly (or so) Meetup. Sign up here.

(12) the MNvest issuer and the portal operator may engage in solicitation and advertising of the MNvest offering provided that:

• (i) the advertisement contains disclaiming language which clearly states:
  • (A) the advertisement is not the offer and is for informational purposes only;
  • (B) the offering is being made in reliance on the exemption under this section;
  • (C) the offering is directed only to residents of the state;
  • (D) all offers and sales are made through a MNvest portal; and
  • (E) the Department of Commerce is the securities regulator in Minnesota;
• (ii) along with the disclosures required under item (i), the advertisement may contain no more than the following information:
  • (A) the name and contact information of the MNvest issuer;
  • (B) a brief description of the general type of business of the MNvest issuer;
  • (C) the minimum offering amount the MNvest issuer is attempting to raise through its offering;
  • (D) a description of how the issuer will use the funds raised through the MNvest offering;
  • (E) the duration that the MNvest offering will remain open;
  • (F) the MNvest issuer’s logo; and
  • (G) a link to the MNvest issuer’s Web site and the MNvest portal in which the MNvest offering is being made; and
• (iii) the advertisement complies with all applicable state and federal laws.

Examples of securities include:

• Equity, where investors become either members or shareholders of the Company
• Debt, where the investors become lenders to the Company
• Convertible Debt, where investors loan money to the Company, which can be converted into equity
• SAFEs, which are most similar to convertible notes, however pay no interest