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Can I use crowdfunding to raise money without violating securities laws in Massachusetts? What are the requirements?

Requirements for Crowdfunding in Massachusetts

To use crowdfunding to raise money in Massachusetts without violating securities laws, you must comply with the requirements of Regulation Crowdfunding [1]. Here are the key requirements:

  1. Maximum Offering Amount: The maximum amount you can raise through crowdfunding is $1,070,000 [1].
  2. Disclosure Requirements: You must provide certain disclosures to investors, including information about your business, the securities being offered, the use of proceeds, and the risks involved [1].
  3. Intermediary: You must use an SEC-registered intermediary to facilitate the crowdfunding offering [1].
  4. Limits on Advertising: You may not advertise the terms of the offering except in a notice that directs investors to the intermediary’s platform [1].
  5. Investor Limits: Investors are subject to certain investment limits based on their income and net worth [1].

Conclusion

To use crowdfunding to raise money in Massachusetts, you must comply with the requirements of Regulation Crowdfunding. This includes providing certain disclosures to investors, using an SEC-registered intermediary, and adhering to limits on advertising and investor limits.

Source(s):
Jurisdiction

Massachusetts