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FAQ

Need more information? Check out the Frequently Asked Questions below, and if you still need help, email us at info@MNvest.org.

Note: This information shall not be construed nor serve as a substitute for sound legal or financial advice. Please contact your trusted advisors before making any investment decisions.

What is MNvest?
What is MNvest.org?
How does it work?
Why should I invest?
Why should I NOT invest?
How much can I invest?
How much money can Issuers raise?
What are the Company (Issuer) requirements?
How is this process regulated?
Is there a list of registered portal operators?
Is there a lower threshold for the amount I can invest? Can I invest $5?
Can I invest as part of an investment group/trust/partnership?
Can I list my offering on more than one portal?
Can you help me decide which offerings to invest in?
What should I take into consideration when looking at businesses to potentially invest in?
Is there a form to fill out to become a Portal operator?
What does it mean that my investment funds are held in escrow?
What's the duration of a MNvest Offering?
As an investor, am I guaranteed to make money?
I made my investment when I was a resident of Minnesota, but I’m moving out of state - what happens to my investment?
I don’t want my investment any longer. Can I re-sell to friends/family/colleagues?
What if I want to cancel my investment?
Is there a form for the Issuer to fill out and file with the state?
I want to learn more. Is there a MNvest group where I can meet others interested too?
Are there any restrictions on advertising an Offering?
What types of securities may be sold?
What is MNvest?

MNvest is a Minnesota law passed in 2015 allowing businesses to raise money online from Minnesota investors.

Here is a link to the state’s MNvest resource website.

Here is a link to the law.

Here is a link to the Rules which accompany the law.

What is MNvest.org?

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.

How does it work?

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.”

Why should I invest?

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.

Why should I NOT invest?

You can lose your entire investment.

How much can I invest?

$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.

How much money can Issuers raise?

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

What are the Company (Issuer) requirements?

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”

How is this process regulated?

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.

Is there a list of registered portal operators?
Visit this link to find registered portal operators
Is there a lower threshold for the amount I can invest? Can I invest $5?

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.

Can I invest as part of an investment group/trust/partnership?

Yes.

Can I list my offering on more than one portal?

No.

Can you help me decide which offerings to invest in?

MNvest.org cannot offer investment advice.

What should I take into consideration when looking at businesses to potentially invest in?

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.

Is there a form to fill out to become a Portal operator?
Click here to access the Portal Registration Form
What does it mean that my investment funds are held in escrow?

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.

What's the duration of a MNvest Offering?

An Offering may last no more than 12 months.

As an investor, am I guaranteed to make money?

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.

I made my investment when I was a resident of Minnesota, but I’m moving out of state - what happens to my investment?

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

I don’t want my investment any longer. Can I re-sell to friends/family/colleagues?

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.

What if I want to cancel my investment?
  • An investor may cancel a MNvest investment commitment for any reason until the target minimum offering amount has been raised. The minimum offering amount must be included in the disclosure documents made available to prospective purchasers and filed with Commerce.
Is there a form for the Issuer to fill out and file with the state?
The MNvest issuer form can be found here.
I want to learn more. Is there a MNvest group where I can meet others interested too?

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

Are there any restrictions on advertising an Offering?

(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.

What types of securities may be sold?

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

Learn More About the MNvest Legislation

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About MNvest

MNvest is a Minnesota law permitting investment crowdfunding, a new way to fund Minnesota's growing businesses. Similar to reward-based crowdfunding sites (like Kickstarter), MNvest enables Minnesota businesses to legally advertise investment opportunities to all Minnesota residents.

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Copyright © 2016 MNvest | Website Powered by Brandography
DISCLAIMER: MNvest.org is a 501(c)(4) nonprofit. Our mission is to educate the public about the state of Minnesota’s MNvest program. We are not a MNvest Portal registered with the state of Minnesota. We do not host offerings of any MNvest Issuers on this website. We do not administer the MNvest program. The Minnesota Department of Commerce is the securities regulator for the state of Minnesota. All questions related to securities offerings under the MNvest program should be directed towards the Securities Division of the Minnesota Department of Commerce. Investing in young companies without an established record of performance is highly risky. You may lose all of your investment.
Please consult your financial, legal and tax advisors before making investment decisions.