To wrap up your crowdfunding framework, you need a Subscription Process. This is the formal “closing” mechanism where an investor legally commits their funds and becomes a shareholder.
In Michigan, you have a unique advantage: the MILE Act (Michigan Invests Locally Exemption). This law allows you to raise capital from both “Accredited” (wealthy) and “Non-Accredited” (everyday) Michigan residents, provided the property and the business are based in the state.
Investor Subscription & Commitment Process
We have streamlined our onboarding into a four-step digital process to ensure legal compliance while providing a frictionless experience for our partners.
Step 1: Pledging & Accreditation
Investors select their desired investment amount (e.g., $25,000).
- Michigan Non-Accredited Investors: Can invest up to $10,000 per company, per year under the MILE Act.
- Accredited Investors: No investment limit. We will provide a secure portal to verify status via a CPA letter or income documentation.
2. Digital Signature (The Legal Binding)
Investors will receive an electronic Subscription Agreement. By signing, the investor:
- Agrees to the terms of the Operating Agreement.
- Acknowledges the 70/30 Waterfall and fee structure.
- Confirms they have read the Risk Disclosures.
3. Funding & Escrow
Once the documents are signed, investors receive wiring instructions or ACH transfer links.
- Escrow Account: To protect all parties, funds are held in a third-party escrow account at [Bank Name].
- The “Minimum” Threshold: If the project does not reach its minimum funding goal (e.g., $1.5M), 100% of the funds are returned to investors from escrow.
4. Post-Closing & Reporting
After the offering “breaks escrow” and the property is acquired:
- Issuance of Shares: Investors receive a digital Certificate of Ownership.
- Investor Portal: You will be granted access to our secure portal to track monthly occupancy reports, tax documents (K-1s), and quarterly distributions.
Summary of the “Michigan Advantage”
By using the MILE Act for your crowdfunding, you can tell your local investors:
“Unlike most national deals that require you to have a $1M net worth, our Michigan-based projects allow any resident of our state to participate in building local wealth for as little as $5,000.”
Final Checklist for Your Offering
| Item | Status |
|---|---|
| The Deal | 70/30 Waterfall with 8% Pref |
| The Asset | Michigan Multifamily Value-Add |
| The Legal | MILE Act Compliant (Intrastate) |
| The Access | Secure Online Subscription Portal |