How to Raise $1 Million in a Year

"Nevada is a business-friendly state; it's the new Delaware for corporations," Trussell says. "The business climate there makes it a good place to incorporate and raise money." Trussell is still in the fundraising stage of the offering and hopes to raise between $900,000 and $1 million in Nevada this year by self-distributing his stock.

But not every NSRO company is looking for big bucks: While in office, Apenbrink saw numerous offerings for companies planning to raise as little as $10,000 or $20,000.

"A business owner might have a contract to hang drywall in several hundred houses in one subdivision, and he might want to raise $30,000 to buy equipment," he says. "There's no stated minimum, but there is a practical minimum. Sometimes companies just can't do it if they're only raising a small amount because of the costs of compliance."

Those costs include legal fees and accounting fees, but no more than 20% of funds raised can go to sales and upfront costs.

Why Nevada?

State registered offerings are available in 46 other states, according to Robert Walsh, Nevada's deputy secretary of state. But the Silver State's version of the program includes some distinctions that make it popular with entrepreneurs nationwide.

For instance, in most states, registration of securities is on a merit basis; the state can deny registration if it determines that the company may not be viable for investors.

Nevada, on the other hand, uses disclosure-based regulation, which requires the issuer to fully disclose its financials and other information to investors, and then leaves it up to investors to take responsibility for their own investment decisions.