I’m simultaneous really glad to see this story from MiBiz.com, and now ratcheted up another notch on my irritation at the Ohio Securities Division for its asinine treatment of the same exact issue. Here’s the lead of the MiBiz story — and a little, particularly aggravating, additional background:
A new crowdfunding portal wants to encourage everyday people to invest in Michigan-based real estate projects that support startups and small businesses.
The barrier to entry: $100.
Within the next 30 to 60 days, the Ann Arbor-based Michigan Municipal League and Washington, D.C.-based Fundrise LLC hope to launch a new website (Michigan.fundrise.com) that will allow Michigan residents to invest in in-state real estate projects.
Fundrise offers accredited and unaccredited investors a way to invest in community-based development across the country, but its efforts in Michigan were made easier by the signing of the Michigan Invests Locally Exemption (MILE) Act. The law, signed by Gov. Rick Snyder last December, liberalized the process of equity-based crowdfunding for Michigan residents.
Executives at the MML see the partnership with Fundrise as a way to offer brick and mortar investment opportunities across the state to complement its work with Localstake, another equity crowdfunding portal for small businesses.
ANOTHER crowdfunding portal.
In an economy that is transitioning swiftly from large to micro-businesses,
where most banks are still so tight with their funds that many entrepreneurs can’t even imagine getting the kinds of loans that we used to take for granted,
where homeownership is declining (a conventional, and personally risky, source of collateral for start-up funds),
and when more and more of the businesses with the best potential for long-term viability can’t get the time of day from a conventional loan source….
We need crowdfunding.
We need it to make more businesses more viable, we need it to give people more options for investing their funds than in the conventional vehicles (many of which have proved to be a lot less reliable than we thought). And we need it to enable people to put their money into their communities, to play an active role in making our places better. We cannot count on government programs or big charities or the like to help us out the way we used to, and they’re only going to keep fading. Increasingly, those investments are going to be on us.
Need, and demand, for crowdfunding is furiously high and getting more intense every day. The US Securities and Exchange Commission, which has spent an obscenely long time figuring out the federal rules, has been passed up by states such as Michigan and Georgia and others, who have gone ahead and figured out how to get this done. Meanwhile, the comparable agency in one of the states that most arguably needs crowdfunding capacity — one of the states that has been hit hardest by the economic upheavals of the last two generations — has not only dragged its feet, but appears to be determined to persecute the first person in Ohio to see this potential and try to make it a reality for Ohio communities and businesses.
OK, I’m a little pissed. Actually, a lot pissed, and for a while now. If you’re in Ohio, and you want small businesses and economically healthy communities, you should be pissed, too.