State Takes Lead on Internet Fundraising

JACKSON, Miss. — A new method for small businesses to raise start-up capital through the internet will soon be available in Mississippi, despite federal inaction by the Securities and Exchange Commission (SEC). 

“Crowdfunding is proven way to raise funds to start or expand a small business through the internet, typically through small individual contributions from a large number of investors,” says Secretary of State Delbert Hosemann. “Mississippi is once again leading the way to encourage small business development, growth for economic development, and create jobs for Mississippians.” 

“In addition to our traditional lending and investment resources, crowdfunding provides greater access to capital for those Mississippi entrepreneurs who are looking for alternative ways to turn their dreams of business ownership into reality,” says John Brandon, Manager of the Entrepreneur Center at the Mississippi Development Authority. 

The 2012 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 so.

Because of the potential crowdfunding provides to startups and small businesses, the Mississippi Secretary of State’s Office created administrative rules to allow the crowdfunding method in the State.

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.

For the administrative rules:http://www.sos.ms.gov/adminbulletinsearch/default.aspx.