May 2014 ALAP Meeting Recap

ALAP met May 8 for our latest “dreamstorm” format potluck meeting. During these meetings we gather with earlier stage companies and other invited speakers to discuss business ideas and general community and impact investing developments. We started this month’s meeting with Brian Rogers of MushroomCSA. Brian is looking to relaunch a mushroom growing and consulting business and shared video with the group of his unique mobile mushroom lab and educational facility that runs on pure vegetable oil. He is in the process of kicking off a crowd-funding campaign and is also exploring other financing options including an array of custom CSA share options for those interested in consuming or growing local gourmet mushrooms. For those interested in learning more about this master of mycelium, he can be reached at

After Brian, we heard an update from Dragonfly Sail Transport Chief Provocateur Jan Barlow and Captain/Ops Manager Mark Thompson. Jan and Mark have been busy networking with other sail transport initiatives around the world and developing a plan that puts their dream of bringing sustainable commercial sail transport back to our region. To shorten the path to break-even, the Dragonfly team is exploring how they might incorporate various charter trips into their model. They plan on offering sunset charters, wine tasting sails, company “off-sites,” etc to keep their classic wooden sailboat, Aquilo, fully utilized as they figure out routes and logistics for the commercial transport business. Jan and Mark are seeking financial partner(s) to help them launch this season and can be reached here:

Wrapping up the evening was Kate Redman, our go-to local attorney for all things related to the sharing economy, crowd-funding, and social enterprise legal structuring. Kate briefed us on newly issued rules for our state’s trailblazing crowd-funding legislation and distributed some great summary information (here’s a great link to start with: Kate also left some summary points for the new rules:

Some basic limits in Michigan’s equity crowdfunding act:
• Up to $10,000 per unaccredited investor, per business. Business can raise up to $1,000,000 (or $2,000,000 if the business owner meet more stringent accounting and financial requirements).
• Offer must not exceed 12 month period.
• Must be Michigan business that does most of its business in Michigan.
• Offer must only be made to Michigan residents. (And the SEC says that to comply with the federal instrastate exemption, no advertising for offer on social media or the business’ website.)
• Offer is registered with the state at least 10 days before an offer is made in reliance on the exemption. Must specify any website used to “offer” the investment opportunity.
• Certain disclosure requirements, including risk, owner of business, terms of offer any outstanding securities, etc. The Act provides specific language an investor must sign (investment is risky, is illiquid, and has not been registered, etc).
• Funds must be placed in escrow at bank until aggregate offering amount is reached (bank may charge fees)
• Specific limits if the security is “offered and sold” on a website
• Business must give quarterly reports.
• Meet federal intrastate exemption, which requires: 1) all offers and sales to investors must be made only to bona fide residents of a single state (even a singleoffer to non-resident defeats the exemption); (2) the state where offers and sales are made must be the state in which the company was organized; and (3) the company making the offering must be “doing business” within that state (generally safe if principal place of business is in Michigan and 80% of gross revenues are from business in state and 80% of assets are here).

Our next meeting will take place 6-8pm Thursday, June 12 at Michigan Land Use Institute. We will hear a presentation from Denny Corrado of DW North, Inc concerning their 911 Medical Alert Flash Drive business. After that we will discuss general ALAP business and begin making plans for Fall (we are not planning meetings for Jul/Aug). We look forward to seeing you in a few weeks!