Minnesota Lt. Gov. Tina Smith, in a recent interview, spoke about the challenges facing emerging Minnesota companies. “If you talk to small businesses in Minnesota and ask them what they need the most,” she noted, “almost all of them will say right up front, ‘I need working capital.’ ”

Day in and day out, we hear the same frustrations from our constituents who are entrepreneurs and small-business owners. The challenge in accessing capital is amplified by the fact that our current Depression-era laws make it unnecessarily complicated and expensive for companies to seek out potential investors.

To help meet this challenge, we introduced legislation known as MNvest that would modernize Minnesota securities laws so that businesses in the state could use the Internet to connect with ordinary Minnesotans who might want to become investors. This process of pooling together capital from a large group of citizens is commonly known as “crowdfunding.”

People generally associate the idea of crowdfunding with reward-funding websites such as Kickstarter or Indiegogo. MNvest is different because it allows Minnesotans to directly invest in the next generation of great Minnesota companies and share in their growth, rather than just making a donation in exchange for something like a T-shirt or a CD.

We’ve found that many of our constituents are surprised to learn that this type of “equity crowdfunding” is not currently permitted in Minnesota. This is primarily due to the fact that our laws have failed to adapt with technology, and in doing so have prevented companies from accessing billions of dollars of untapped capital.

Similarly, our current laws are designed to allow “accredited investors” (basically, only the wealthiest Minnesotans) to invest in young, emerging companies and reap the financial upside when those companies have success. MNvest would allow all Minnesotans to become investors.

Minnesota has a rich history of protecting consumers, and all current laws regarding securities fraud and minority shareholder rights will continue to apply. In addition, MNvest adds new, common-sense investor protections. For one, all investment opportunities must be made through a portal website, registered with the Department of Commerce. The businesses seeking capital must make detailed disclosures to investors regarding their operating history and future business plans. All of these precautions and more are put in place to deter potential risks for both the businesses and the investors.

We acknowledge that there is always a certain amount of risk that comes with investing, whether now or in the future. But that risk should not stop us from implementing new and innovative ways to support our local economy. In fact several business groups have expressed their support for MNvest, including the Minnesota Chamber of Commerce, the Twin Cities Metro Independent Business Alliance, LifeScience Alley, the Minnesota High Tech Association, the Social Enterprise Alliance, the Minnesota Black Chamber of Commerce, and TiE Minnesota, to name a few.

Modernizing Minnesota’s securities laws with MNvest should not be controversial. Similar crowdfunding laws have been enacted around the country with overwhelming bipartisan support. Our Midwestern neighbors of Michigan, Indiana and Wisconsin were among this group of innovative states. We look forward to being part of this important new frontier.

With MNvest, we will continue to foster the great entrepreneurial spirit of this state, which will lead to business growth and more jobs. Statistics show that every $37,702 invested in start-ups creates one new job, and that every $1 invested generates more than six times that amount in revenue.

Equity crowdfunding provides a wider, less-costly and effective way for Minnesota businesses to access the money they need to drive our economy forward. And it is a tool that shows no signs of slowing down. Industry experts project that by 2020, crowdfunding will generate $3.2 trillion in economic activity and create more than 2 million jobs.

MNvest is a common-sense solution to a problem that has long faced Minnesota businesses that desperately need access to capital. It democratizes the investment process, allowing all citizens the opportunity to participate. Ultimately, it will help drive the Minnesota economy forward. This is why MNvest is right for Minnesota.

Please visit MNvest.org to learn more.

Terri Bonoff, DFL-Minnetonka, and Branden Petersen, R-Andover, are members of the Minnesota Senate. Jenifer Loon, R-Eden Prairie, and Joe Atkins, DFL-Inver Grove Heights, are members of the Minnesota House.