State’s New Internet Crowdfunding Aims to Connect Small Business to Big Investors

JACKSON, Miss. – There’s now a new method for start-up businesses to get connected with investors through the internet in Mississippi. Friday, Secretary of State Delbert Horsemann announced online crowdfunding will be available through the Secretary of the State’s Office.

“You’ll be able to go on the internet and ask for contributions from $5,000 up to $50,000 depending on who is making the actual contribution.  Those contributions will be placed in a bank, in an escrow, until you’ve raised approximately 50 percent of the money involved. At that point and time the money will be issued and you will start that small business,” said Hosemann.

Hosemann believes this will be a medium to connect individuals with a large number of investors, both big and small, and hopes the end result will be more economic development, creating jobs for Mississippians. He says it will also put Mississippi in a position of leading the way to encourages small business development.

In 2012 the JOBS Act created a new federal exemption allowing for small businesses to raise capital through securities offerings on the internet. The SEC was directed to adopt rules implementing the new crowdfunding method across the nation but never did.

There will be no filing fee making this the lowest filing cost in the country. Mississippi businesses intending to use the crowdfunding method are required to file a disclosure statement with the Secretary of State’s office. Online filing will be available.