Indiana facilitates capital formation by providing access to securities offerings through multiple offering methods. Crowdfunding is a method of raising capital from a large number of people who each invest relatively small amounts of money. Securities sold in this way rely on federal and state securities registration exemptions. While the SEC rules apply to crowdfunding on the national level, many states, including Indiana, have enacted their own intrastate crowdfunding laws. The Indiana Secretary of State, Securities Division (“Division”) regulates the issuance of securities through crowdfunding.

Crowdfunding is a money-raising strategy that began as a way for the public to donate small amounts of money, often through social networking websites, to help finance projects. Through Indiana’s crowdfunding rules, small businesses and entrepreneurs can utilize crowdfunding as a means to finance business ventures.

Under Ind. Code § 23-19-2-2(27), an issuer of securities can raise up to two million one hundred fifty thousand dollars ($2,150,000) in a crowdfunding offering. The issuer can raise up to five thousand dollars ($5,000) from any single purchaser of securities. Additionally, the issuer of securities is required to provide disclosure documents to prospective investors that contain information about the offering. The disclosure documents provide transparency for prospective investors which enables investors to make informed decisions.

The crowdfunding offering is required to be made exclusively through one (1) or more registered internet website operators. An internet website operator serves as an intermediary for crowdfunding offerings. Because companies using crowdfunding may not make investment opportunities directly available to individual investors, the internet website operator facilitates the investment. A registered broker-dealer or investment adviser who also serves as an internet website operator must register with the Division as an internet website operator; however, the fee for registration shall be waived with evidence of licensure as a broker-dealer or investment adviser.

Under the Securities Act of 1933, the offer and sale of securities must be registered unless an exemption from registration is available. Title III of the Jumpstart Our Business Startups (JOBS) Act of 2012 added Securities Act Section 4(a)(6) that provides an exemption from registration for certain crowdfunding transactions. In 2015, the SEC adopted Regulation Crowdfunding to implement the requirements of Title III which permitted eligible companies to raise capital using Regulation Crowdfunding beginning May 16, 2016. In order for an issuer to conduct a Regulation Crowdfunding offering, there are various requirements to be met such as maximum offering amount, investor limits, intermediaries, and eligibility. The Securities and Exchange Commission (“SEC”) Compliance Guide was created to assist issuers in complying with federal guidelines.

• The issuer registration is completed on the Indiana Securities Portal.
• The initial filing fee for an issuer is one hundred dollars ($100).
• The issuer must be a business entity organized under the laws of Indiana and authorized to do business in Indiana.
• The transaction must meet the federal exemption for intrastate offerings.
• An issuer can raise up to two million one hundred fifty thousand dollars ($2,150,000) through its crowdfunding offering.
• An investor in the offering can invest up to five thousand dollars ($5,000).
• The offering must be conducted through a registered internet website operator.
• The issuer must complete and submit the required Invest Indiana Notice of Issuer [State Form 55901].
• A copy of the Disclosure Document pursuant to Ind. Code § 23-19-2-2(27)(L) must be submitted to the Division.
• A copy of the Escrow Agreement pursuant to Ind. Code § 23-19-2-2(27)(F)(iv) must be provided with the registration.
• The registration and any associated filings must be submitted ten (10) days before an offering commences.

• The internet website operator registration is completed on the Indiana Securities Portal.
• The initial filing fee for internet website operator registration is one hundred dollars ($100).
  • The initial fee is waived if the entity is a registered broker-dealer or investment adviser.
• Internet website operators must maintain a surety bond in the minimum amount of fifty thousand dollars ($50,000).
• Internet website operators shall make and preserve all records related to offerings for five (5) years.
• A registered internet website operator may facilitate registered crowdfunding offerings through its website.

• The federal crowdfunding registration is completed on the Indiana Securities Portal.
• There is no initial filing fee for issuers that file a Uniform Notice of Federal Crowdfunding Offering to the Division.
• If the issuer has either its principal place of business in Indiana or sells fifty percent (50%) or greater of the aggregate amount of the offering to residents of Indiana, the issuer shall file with the Division a Uniform Notice of Federal Crowdfunding Offering.
• If the issuer has its principal place of business in Indiana, the Uniform Notice of Federal Crowdfunding Offering must be filed with the Division when the issuer submits its Form C to the SEC.
• If the issuer sells fifty percent (50%) or greater of the aggregate amount of the offering to residents of Indiana, the Uniform Notice of Federal Crowdfunding Offering is required by the Division when the purchase threshold is met and not later than thirty (30) days after the completion of the offering.
• Federal law has numerous requirements for the federal crowdfunding exemption. To ensure compliance at a federal level, consult the SEC Compliance Guide and legal counsel.

Indiana Code [23-19]
Crowdfunding Rules
Exempt Transactions Ind. Code 23-19-2-2(27) [19-0002 AO - July 1, 2019]
Compliance Alert: Indiana Securities Division Response to the COVID-19 Outbreak [March 24, 2020]

17 CFR § 230.147A Intrastate sales exemption.
Form C
Invest Indiana Crowdfunding Checklist (IC 23-19-2-2(27))
Invest Indiana Final Report of Sales
Invest Indiana Internet Web Site Operator Bond [State Form 55630]
Invest Indiana Internet Web Site Operator Registration [State Form 55631]
Invest Indiana Notice of Issuer [State Form 55901]
Invest Indiana Registered Internet Web Site Operators
Jumpstart Our Business Startups (JOBS) Act of 2012
NASAA Intrastate Crowdfunding Resources
Notice of Issuer - Offering Pursuant to Indiana Code 23-19-2-2(26) [State Form 55900]
SEC Compliance Guide
Securities Act of 1933
Uniform Notice of Federal Crowdfunding Offering [Form U-CF]