The new ability to solicit and advertise securities within the State of Minnesota may be a boon for entrepreneurs and small business owners. Only time will tell. As one can anticipate, the opportunity to solicit prospective purchasers by advertising securities for sale comes with a few required disclaimers and restrictions on those advertisements.
Under Minnesota’s new Equity-based Crowdfunding Act, the MNvest issuer and the portal operator may engage in solicitation and advertising of the MNvest offering. In order to do so, however, the advertisement must contain disclaiming language, which clearly states:
1. The advertisement is not the offer and is for informational purposes only.
2. The offering is being made in reliance on the exemption under this section.
3. The offering is directed only to residents of the state.
4. All offers and sales are made through a MNvest portal.
5. The Department of Commerce is the securities regulator in Minnesota.
Moreover, in addition to the advertisement complying with applicable federal and state law , the advertisement may contain no more than the following information:
6. The name and contact information of the MNvest issuer.
7. A brief description of the general type of business of the MNvest issuer.
8. The minimum offering amount the MNvest issuer is attempting to raise through its offering.
9. A description of how the issuer will use the funds raised through the MNvest offering.
10. The duration that the MNvest offering will remain open.
11. The MNvest issuer’s logo.
12. A link to the MNvest issuer’s Web site and the MNvest portal in which the MNvest offering is being made.
This is the 4th in a series of articles concerning Minnesota’s new equity-based crowdfunding act – MNvest. Please visit Parts 1, 2 and 3 for information you need to know about Required Disclosures, What’s in an Offering, and Who Can Be an Issuer. The contents of these articles reflect the language of Minnesota Statutes Section 80A.461 subdivision 3(12).
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