On The Record With Minnesota’s Department of Commerce Concerning MNvest


MNVestThe attorneys received their recognition and politicians their credit; the agency got your tax money.  And the entrepreneurs? They can just wait until it’s convenient.

That’s the conclusion reached after email exchange with Minnesota’s Department of Commerce, the chief regulator of new intrastate equity crowdfunding law MNvest.

A final version was included within a jobs bill passed during special session, after which one legacy media reporter had the courage to call out the catch: there’s no actual requirement to act.

As a follow-up, here’s the Department’s own Ross Corson on the record, on some uncertain terms:

What steps will the Minnesota Department of Commerce take to make equity crowdfunding in Minnesota a reality now that it is law?

The Commerce Department expects to commence the required rulemaking process as quickly as possible once the new fiscal year begins on July 1.

Expectation is that the initial 60-day required public comment period will begin with the official publication of a “Request for Comments” in the State Register in early July.

Attached are both a general overview and chart of the State of Minnesota rulemaking process.

When does the Minnesota Department of Commerce intend for issuers and portals to begin exercising their new right to equity crowdfund within Minnesota?

The legislation requires the Commerce Department to establish registration and record retention requirements for portal operators as well as procedures for issuers to provide notice to the agency of an offering.

Executive Branch agencies must engage in the rulemaking process to establish necessary requirements that are not set out in the statute.

While there are minimum 60-day and 30-day comment periods required as part of the process, it is too early to say what the overall timeline for the MNvest rulemaking will be.

Is there a maxmimum amount of time the Minnesota Department of Commerce could take for the rulemaking and implementation?

There is no maximum time period set by statute.

How will Minnesota’s Department of Commerce apply the $130k in taxpayer funding for MNvest rulemaking & how does the estimated 2,900 man hours needed break down?

The Legislature provided $129,749 in Fiscal  Year 2016 for rulemaking.

The Commerce Department’s fiscal note on SF 138 indicated that the Department assumes that rulemaking to develop these procedures will be a medium rulemaking procedure as defined by the Minnesota Rulemaking Manual.

The Commerce Department’s fiscal note was based on discussions with securities regulators in other states that have established equity crowdfunding exemptions as well as the agency’s past rulemaking experience.


Want To Crowdfund Some Cash? Not So Fast Says Commerce Department

Minnesota’s Department of Commerce Is Out To Kill MNvest

Would MNvest crowdfunding draw investors?



  • https://estatemap.com/ Joe Henderson

    How delightfully imprecise. I am trying hard to refrain from eye rolls.

  • Zach Robins

    Jeff, thanks for so closely following this story as it has evolved over the past year. We appreciate your commitment to the issue!

    • http://tech.mn Jeff Pesek

      Hi Zach, regarding Frank’s comments above – and since you were so close to the bill – was there ever a timeline in the draft, on the table, or part of the conversation with Department of Commerce?

      • Zach Robins

        Jeff – in our five or so meetings with Commerce, I don’t recall ever discussing administrative rules. From my recollection, the first time I became aware of their intent to draft rules was during the final senate testimony, well after our round of meetings. The focus of our meetings was understandably on the law being drafted, so it would have been premature to discuss rules for a law that was still in flux. Per Frank’s comments, I don’t know how realistic (or even permissible) it would have been to legislate a timeline for prospective rules, as Commerce has pretty broad rulemaking authority pursuant to Minnesota Statutes, sections 45.023 and 80A.82. Regardless, this was nowhere near our radar at the time. We were laser-focused on getting a workable law passed, and finagling with a department’s rulemaking would likely have raised the ire of Commerce and presented further challenges…

  • Frank Jaskulke

    Gents – Ross being part of the administration of law is bound by the law – precise or imprecise. If you want the legislation to implemented faster you have to take it up with legislatures, not administrators. These sorts of blocking and tackling of “sausage” making are often missed by advocates resulting in ambiguity.

    • http://tech.mn Jeff Pesek

      Hi Frank, Is this something that you think could be changed at this point?

      “If you want the legislation to implemented faster you have to take it up with legislatures, not administrators.”

      • Frank Jaskulke


        The legislature is no longer in session. To change it you would have to get a special session called or wait till the new session starts in 2016. By 2016 the rule making will be done.

        • http://tech.mn Jeff Pesek

          Given that the timing has passed, how would you suggest the entrepreneurs go about expediting the process now?

          “By 2016 the rule making will be done.” – says who?

          • Frank Jaskulke

            There is not much that can be done to expedite the process at this point. But it is not as bad as it is being made out to be. Minnesota’s government administration is light years more productive than anywhere else in the country.

            Productive does not mean fastest though. In this context it tends to mean that Minnesota’s administrators produce rules that are less complex and easier to follow than most other places, most of the time. Not every place every time, but most of the time.

            That reduces the risk for error and lawsuits. I won’t argue the merits or demerits of our tort friendly society, but that is the way things are presently.

            Good rulemaking makes for good results and fewer lawsuits.

            Given a choice between a rule knocked out in 30 days and then getting sued by an investor because of a disagreement on the placement of a comma or the meaning of a word (The King v Burwell decision from last week comes to mind) or a rule that took 90 days and then smooth like a new Mercedes…

            Entrepreneurs (and citizens generally) should arm themselves with knowledge about how government works – for better and worse – so they can be effective advocates.

          • http://tech.mn Jeff Pesek

            “Minnesota’s government administration is light years more productive than anywhere else in the country” – source?

            And in summary, if I understand what you’re saying Frank: for a distinct timeline to exist, it should have been included in the bill introduced by the legislators and influenced by the attorneys who championed it.

            Is that the gist of your initial comment?

          • Frank Jaskulke


            The summary is correct. Timelines for rule making are legislatively prescribed. Legislators make the law and administrators execute it. If you want to change execution, change the law.

            Source is my personal experience and that of other lobbyists I work with in state policy around the US. Which is certainly a biased source :)

          • http://tech.mn Jeff Pesek

            Very valid point, Frank. Unfortunately there was not a time factor included within the law in the first place. It would be interesting to know if that was even part of the draft bill or a topic of conversation? I don’t recall, and the negotations were private.

            Your prognostication that MNvest rulemaking will be accomplished and the law applicably usable in 2016 is appreciated. Until a set date comes from the Department itself though, that’s futile guesswork.

            Every day between when this law was passed and the Department fulfills its duties, they are acting as a defacto barrier between MN entrepreneurs and money. The opportunity costs are real.

            PS. You’ve piqued my curioisty…who do you lobby for?

          • Frank Jaskulke


            I doubt time frame was a part of the discussion. It is not a common discussion on any legislation unless there is an external deadline (like a federal requirement that such and such be done by a certain date). It just wouldn’t be a thing that comes up.

            My employer, LifeScience Alley, is a trade association (501C6 not for profit). We are a lobbying organization. I don’t do direct lobbying anymore but am still involved in our policy work.