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Posts Tagged ‘crowdfunding’

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?

e-mail: Jeshua@dwlawpc.com

Twitter: @JeshuaTLauka

www.dwlawpc.com

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Small Business, Social Entrepreneurs and Crowdfunding

Just a few days ago I posted on the Michigan House Resolution supporting Equity Crowdfunding.

This morning I read an article on CrowdfundInsider on the topic of financing for small businesses.

Access to Capital: What are the Options for Small Company Finance?

Candace Klein Chief Strategy Officer at DealStruck was Interviewed 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.”

 

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.

Comments? Questions?

e-mail: Jeshua@dwlawpc.com

http://www.dwlawpc.com

Twitter: @JeshuaTLauka

Michigan Entrepreneurs and Start-ups: House Resolution Supports Crowdfunding for Start-up Businesses

March 8, 2016 1 comment

On March 3,  Representative Tom Barrett introduced House resolution 235 (HR 235).  Today HR 235 was on the agenda for the Commerce and Trade Committee Meeting.

HR 235 is a  “resolution to support the United States Securities and Exchange Commission’s recent adoption of rules pursuant to Title III of the JOBS Act which are designed 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.)

HR 235 ends by stating that:

“we support the United States Securities and Exchange Commission’s recent adoption of final rules pursuant to Title III of the JOBS Act which are designed to facilitate small and start-up companies’ access to crowdfunding capital, fostering entrepreneurial growth and continued job creation in the state of Michigan and across the United States”

Entrepreneurs and Start-ups:

Although the resolution has no real significant legal effect, Michigan legislators want you to know that they are on your side.

A key point addressed in the resolution is the balance between allowing startups access to capital, all the while ensuring adequate “investor protections” for the unaccredited investor.

e-mail: Jeshua@dwlawpc.com

Twitter: @JeshuaTLauka

www.dwlawpc.com

Looking for Social Entrepreneurs and Business Leaders to Prosper our Local Communities

September 10, 2015 1 comment

Last week I attended an event held by the Koeze Business Ethics Initiative at Grand Valley State University. the conversation was titled: “Social Capital, Economic Diversity and Civic Well-Being in Flint and Grand Rapids

The room was packed full of leaders in the Grand Rapids and Flint Communities interested in hearing about, in the words of Dr. Michael DeWilde “what we can do to better encourage practices and policies that will help ensure a city’s…prosperity in the long term.”

I was privileged to sit at a table with Kevin Stotts of Talent 2025; Elissa Hillary of Local First Emily Loeks of Celebation Cinemas, Ellie Frey Zagel of Family Business Alliance and  Keith Maki and John Longschamp of Cascade Engineering.

These leaders are tackling the issue on a daily basis  – how do we ensure our local community’s long term prosperity?

A few take aways for me:

1. Michigan is not a B-Corp State – Why  not?

I’ve previously written and presented on Beneficial corporations (B-Corps).       27 states (excluding Michigan) allow for the formation of “B-Corporations”  Essentially, B-Corps have two purposes:

a. to create profit; and                                                                                                         b.  “create a material positive impact on society and the environment”

B-Corps also Impose heightened fiduciary duties on their board of directors – to  consider social/environmental consequences for board decisions.

Not in Michigan…

Bills that would authorize the formation of B-Corps have been proposed, but never enacted.

B-Corps are a way for businesses to instill at their most fundamental level, values that go well-beyond merely turning a profit for its shareholders.

It’s about time for another bill to be introduced (and passed) in the Michigan legislature.

2. We need more  business leaders sacrificially engaging our community. 

We need more business leaders committed to actively serving.

From Dr. DeWilde and Davis’ study, it appears that there is a correlation to a prosperous cities and cities where the business community is actively engaged in non-profit service.

Needs are all around us in our local community.  At some level, all of us who work in the business community know this. The problem is, there is often a disconnect between the conceptual problems like “poverty” “broken homes” “hunger” “substance abuse” and how we let those realities affect our daily lives.

We need more people who are willing to simply show up and engage the needs in our local community on a personal level.

I like to use my church, Crossroads Bible Church as an example. Crossroads is part of the Westside Grand Rapids neighborhood.  We have come alongside Stocking Elementary School to serve the children in that school in many ways.  Some of our members have taken to mentor students. Before then, most of these mentors knew, in theory, that there were children growing up in poverty and broken homes in Grand Rapids (even if they hadn’t experienced those situations themselves).  Now, they can put a face and a name to children in desperate need of adult role models.  We have become invested.

We need more people who are willing to just show up and engage the needs all around us.   Just show up.

3. Crowdfunding to support our local businesses.

How do we get people in our community to support local business?

Support equity crowdfunding for locally owned start-up businesses.

We know that crowdfunding has worked so well for community development. The MEDC’s matching grant program is proof of this.

Get local investors excited about owning a stake in a local business. Take an active role in bettering our community.

Questions? Comments?

e-mail: Jeshua@dwlawpc.com

www.dwlawpc.com

Michigan Entrepreneurs: News and Info on Raising Capital and Crowdfunding

August 3, 2015 Leave a comment

Good morning and Happy Monday!

Entrepreneurs may want to take advantage of some free guidance provided by the State of Michigan.

The State of Michigan’s Department of Licensing and Regulatory Affairs (LARA) announced today that it is hosting a workshop – “Understanding Your Options for Raising Capital in Michigan”. You can Register here  The seminar will be held in Lansing and other locations all across Michigan.

According to the press release, the Seminar will discuss

  • legal and structural basics;
  • key formation and other often overlooked issues;
  • private offerings using regulation D or intrastate exemptions (504/SCOR, 504/202(1)(n) and 201(g));
  • Michigan intrastate crowdfunding;
  • crafting a winning investor pitch; venture capital; long-term planning for a potential IPO;
  • protecting yourself from arbitration, civil litigation and potential criminal liability.

Its good to hear that one of LARA’s topics will be crowdfunding under the MILE Act.

As I’ve previously written about, Michigan’s intrastate crowdfunding exemption could be a useful tool for entrepreneurs, but it hasn’t gained much traction. There are many “unknowns” that are detracting entrepreneurs from pursuing local crowdfunding (and many lawyers who are educating their clients about the risk of these “unknowns”).

Still, more and more states are enacting intrastate crowdfunding laws in order to provide another tool for local entrepreneurs in funding their ventures.

In Michigan, a house bill was proposed back in February to amend the MILE Act to permit issuers to open escrow accounts with financial institutions outside of the State of Michigan. You can see the text of the bill here. It doesn’t appear that the Bill has gained much traction. However, it is a good sign that the legislature is still evaluating ways to make the MILE Act a useful tool for local entrepreneurs.

Questions? Comments?

e-mail: Jeshua@dwlawpc.com

http://www.dwlawpc.com

Recent Crowdfunding Success a Good Sign for Social Entrepreneurs

Last week MIBiz reported a somewhat surprising result of the MEDC’s grant-matching initiative (Public Places Community Spaces Initiative).  I  wrote about this initiative in a prior post.

The MIBiz article headline:

State-backed crowdfunding initiative hits 97% success rate in first year

This is an amazing success rate by any calculation

As stated by Ebrahim Varachia, president and co-founder of Detroit-based Patronicity

“It is quite rare…[to see crowdfunding initiatives with that level of success]”

What Projects are being funded?

Its worth looking at the type of projects that were successfully pitched to the public and funded, per MIBiz:

“They range from a historic manufacturing building restoration in Calumet and a recreational sports complex in Sparta to an outdoor soccer field a few blocks from the Capitol Building in Lansing and a public art installation in downtown Grand Rapids. They also include a neighborhood opera house in Detroit and a new pavilion along the Kal-Haven trail in Southwest Michigan.”

What is the take away?

Although equity-based crowdfunding still carries with it a lot of open concerns and uncertainty, the latest success of the MEDC’s initiative at a minimum shows that

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.

A Social entrepreneur whose business model is rooted in serving some facet of your local community – there is a place for you and your business.

Questions? Comments?

e-mail: Jeshua@dwlawpc.com

www.dwlawpc.com

Michigan Startups: Funding through Crowdfunding

I read an article this morning on MIBiz

Filling the Funding Gap: More capital required to meet $1.3 billion need from existing Michigan companies

Recognizing this gap in funding, John Kerschen, managing partner of  Charter Capital Partners said this:

“Institutional investors have been reluctant to put money into the small, first-time funds in Michigan that have formed over the last decade and first want to see a track record of success”

This is a point well-taken. Small business start-ups have traditionally suffered from a lack of conventional funding options.

As the MiBiz article recognizes – there is a funding gap in Michigan – particularly related to early-stage businesses.

While we are consistently seeing crowdfunding being utilized in Michigan for community revitalization, particularly through the MEDC’s matching grant program,  we are still at the beginning stages of seeing the utilization of equity crowdfunding through Michigan’s MILE Act.

Questions? Comments?

e-mail: Jeshua@dwlawpc.com

http://www.dwlawpc.com