HELENA, Mont. — Montana business owners have a new way to raise capital – through equity crowdfunding – now overseen by the Montana Commissioner of Securities and Insurance Monica Lindeen.
Many Montanans are already familiar with various online fundraising mechanisms, such as GoFundMe and Kickstarter. But to raise equity in a company – to sell its own stock to investors – businesses generally have had to undergo a lengthy process to gain approval of the securities.
But that changed with the unanimous passage of House Bill 481 by the 2015 Montana Legislature. Now, with just a $50 filing fee and an application 10 days prior to any fundraising, Montana businesses can raise up to $1 million from Montana investors in a 12-month period.
“Now Montana businesses can raise equity directly from Montana investors,” said Monica Lindeen, Montana Commissioner of Securities and Insurance. “With this new process, more and more Montana entrepreneurs can reach out directly to their customers and neighbors to help them realize their dreams, without costly and complicated regulations or going to the bank.”
Investors must be Montana residents and can invest small amounts, or up to $10,000, although accredited investors can invest unlimited funds. The company must provide certain disclosures to the investors – and CSI provides a template at www.csimt.gov to help businesses get started.
Since this law took effect, the office of the Commissioner of Securities and Insurance has received and approved two applications from Montana businesses. They expect to see more, as Montana was rated the top state in the nation for start-up businesses by the Kauffman Index in 2014 and 2015.
Commissioner Lindeen will discuss crowdfunding at Accessing Capital: Financing Your Business in the 21st Century, the 16th Small Business Opportunity Workshop hosted by Senator Jon Tester in Billings on Tuesday, Feb. 16, at the Petra Center at Montana State University-Billings. The conference starts at 8 a.m.; Lindeen will discuss crowdfunding in a panel on “NextGen Financing” starting at 9:45.
The workshop is free and open to the public. Registration and more information on the workshop is here: http://www.tester.senate.gov/?p=press_release&id=4273.
Businesses interested in equity crowdfunding can call the office of the Commissioner of Securities and Insurance at 800-332-6148.