Wisconsin, Kansas change laws and regulations to allow for small-business "crowdfunding"

Wisconsin lawmakers passed a bill in October that they say will provide a new way for the state’s small businesses to access capital — “crowdfunding.” AB 350 received unanimous approval in the Assembly and Senate.

According to The Milwaukee Business Journal, the measure seeks to build on the success of Internet-based funding platforms such as Kickstarter, where individuals can and do pledge money in support of a wide range of creative projects (proposals to make a movie, for example).

The legislation changes Wisconsin’s securities laws to allow in-state businesses and potential investors to connect via crowdfunding platforms. Without the change in law, the bill’s authors say, the price of registering to sell securities was simply too high for many businesses.

Federal crowdfunding legislation was signed into law last year, but the rulemaking process for it has not yet been completed. Two years ago, Kansas became the first U.S. state to change its securities rules to allow for crowdfunding, Bloomberg Businessweek reports. Under the Invest Kansas Exemption program (legislative action was not required to implement it), small businesses can raise up to $1 million through the sale of securities.

November 2013 ~ Stateline Midwest1.73 MB