Archive for the ‘MILE Act’ Category

Michigan Entrepreneurs and Small Businesses: Crowdfunding Law Update.

Last year  Representative Tom Barrett introduced House resolution2015-11-26-13-04-02 235 (HR 235)

“to support the (SEC)’s recent adoption of rules…to facilitate small and start-up companies’ access to capital raised through crowdfunding.”

The resolution supports crowdfunding as viable tools for start-up businesses.

The resolution acknowledges:

Businesses in Michigan have greatly benefited from the opportunities created by the…Michigan Invests Locally Exemption (MILE) program. MILE has allowed everyday Michiganders, referred to as unaccredited investors, the ability to play a larger role in growing Michigan’s creative business ventures through Michigan-based crowdfunding platforms while still enjoying investor protections and security in their investments” (Emphasis added.)


Is Crowdfunding a Viable Option in Michigan?

Fast forward to today,  MIBiz recently reported that Michigan’s crowdfunding law hasn’t gained much traction

However, it may remain a viable tool for cash-strapped startups and the Michigan legislature has not given up on it.


Yesterday the Michigan House passed HB 4035 that amended the Michigan Invests Locally Exemption to Intrastate Crowdfunding.


According to yesterday’s announcement from the Michigan House Republican Website:

The amendments contained in HB 4035 “will expand the program so people can also invest in small businesses primarily doing business in the state and allows Michigan’s law to remain active under new Federal regulations

You can check out the House Fiscal Agency’s Analysis Here

The HB now moves to the Senate Commerce Committee for consideration.


Entrepreneurs and Start-ups:


Proponents of Crowdfunding: access to capital.

A while back Candace Klein Chief Strategy Officer at DealStruck was Interviewed by CrowdfundInsider and talked about how small business might benefit from crowdfunding. She had this to say, in part:

“Most businesses are community-based, and have an immediate impact for those in their community, whether geographic or industry-based.  Crowdfunding brings these companies together with the everyday investors in their communities.”


Crowdfunding for Social Enterprise?

I agree. As I’ve previously written about, crowdfunding appears to be a viable tool for community based businesses.

People are willing to invest in projects that will enhance their local community.

This is what makes local equity-based crowdfunding attractive for social entrepreneurs.

This is what makes local equity-based crowdfunding attractive for social entrepreneurs.


Questions? Comments?


Twitter: @JeshuaTLauka

Social Entrepreneurs and Small Businesses – Update on Intrastate Crowdfunding

May 14, 2015 1 comment

A recent Detroit Free Press article highlights the success of Tecumseh Brewing Co, the first business in Michigan to utilize Michigan’s intrastate crowdfunding exemption to securities registration, commonly referred to as the MILE Act.

Crowdfunding: Potential for Start-up Businesses.

As the Free Press article explains, The story of Tecumseh Brewing Co highlights why equity crowdfunding is attractive to small startup businesses who may struggle to secure conventional financing.

“We went through bank after bank. They couldn’t justify giving out a loan to two guys starting a business,” said Kyle DeWitt, general manager and cofounder of Tecumseh Brewing Co.”

Without a doubt – the ability to reach a large pool of investors that were previously unreachable due to Securities Law restrictions is attractive to small businesses.

More States Enact Laws Permitting Intrastate Crowdfunding

Yes, as the Free Press article describes, states are realizing that intrastate crowdfunding can be a viable tool for small businesses. Per the Free Press’s calculation, 23 states have enacted laws permitting crowdfunding, and a dozen more states have proposed bills.

Crowdfund Insider, through  Illinois Crowdfunding Attorney Anthony Zeoli, recently provided a nice “big picture” update on the state of Intrastate Crowdfunding. Check out that article here

Problem Areas

potential abuse

Attorney Zeoli’s article also recognizes the problem areas of crowdfunding exemptions enacted by many states.  The obvious areas of concern often identified by regulators is the potential abuse of such exemptions by scammers and frauds, who may want to take advantage of an “unsophisticated investor.”

limited utility

Another such problem affects the “utility” of the laws; particularly, the limitation on real estate holding companies to utilize many intrastate crowdfunding exemptions.

Attorney Zeoli advises legislators to more narrowly tailor this exemption – I’d be in favor of a Michigan amendment such as is proposed in Illinois HB 3429.

With all of the development and revitalization efforts in Detroit, check out this recent article about the Brush Park Development, Grand Rapids, and other major cities, so long as disclosure safeguards are in place, why not make it as easy as possible for local investors to own a project in their local community?

Questions? Comments?


Update on Michigan Intrastate Equity Crowdfunding (MILE Act)

April 15, 2015 Leave a comment

A quick update on Michigan’s MILE Act – Intrastate Equity Crowdfunding….

I have written about previously that the State of Michigan has been slow to propose and implement rules to provide guidance on the practical application of Intrastate Crowdfunding.

Today, Michigan’s Department of Licensing and Regulatory Affairs (LARA) issued a posting on its website: “LARA Offers Tips on Intrastate Equity Crowdfunding; 2013 PA 264 streamlines process for Michigan investors to invest in Michigan’s small businesses” check out the press release here

The posting acknowledges the advantages of this new legislation, indicating that it allows local Michigan businesses  “to sell an interest in its business to non-accredited investors without having to register these interests as securities. The new law provides a streamlined procedure to allow Michigan investors to invest in Michigan small businesses; in turn, allowing these businesses to raise capital.

However, the posting doesn’t so much seem to provide any additional guidance, but merely caution to prospective investors and issuers.

Small businesses must be aware of the requirements for qualifying for the exemption from registration so they don’t run afoul of federal and state securities laws.

LARA’s posting seems to point to the fact that Michigan and the Federal government are waiting for clarity.

As the post goes on to state:

“The Jumpstart Our Business Startups Act of 2012 (JOBS Act) requires the SEC to promulgate rules on crowdfunding. The SEC published its proposed rules on October 23, 2013 for public comment, but have not yet been finalized.”

Looks like to some degree we are all waiting on the SEC for guidance….

News in Local Crowdfunding…

Local West Michigan Investment Company Loquidity‘s CEO Jesse Clem will be speaking on Crowdfunding: “Community Impact Investing” here

It’s great to see local Social Entrepreneurs at work!

Questions? Comments?


Michigan Business Update for Social Entrepreneurs and Business Owners

April 13, 2015 Leave a comment

Happy Monday, all!

A quick update – I recently posted on social entrepreneurship and crowdfunding in Michigan. Check that post here. By way of update, Today, the Michigan Economic Development Corporation (MEDC) posted a press release  about a crowdfunding campaign launched by a Ypsilanti non-profit –  “Cultivate Coffee and Tap House.”  As I’ve mentioned in a prior post, the MEDC has a matching grant program “Public Spaces Community Places Initiative”  to match local crowdfunding projects.

According to the press release:

“Cultivate Coffee & Tap House is a non-profit in Depot Town, Ypsilanti that provides sustainable solutions for hunger relief through local and global gardening programs. Cultivate is in the process of renovating a half acre of land into an outdoor gathering space and community garden with a 2,100 square-foot coffee and tap house.”

This is a great example of social entrepreneurship utilizing crowdfunding to “do good” in a local community. Although it hasn’t been widely implemented yet, I believe Michigan’s MILE Act will be useful for social entrepreneurs to begin equity crowdfunding. Only time will tell.

In other news…

I’ve previously posted on new Michigan laws aimed at removing employment barriers. See prior post here

The Michigan Small Business Association has put together a nice article summarizing the three new Michigan Bills intending to reducing employment barriers for felons. Business owners may want to get familiar with these laws.

questions? Comments?