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Law Change Could Boost Little-Used Wis. Crowdfunding Laws

Law Change Could Boost Little-Used Wis. Crowdfunding Laws

April 20, 2017 05:12 PM

MADISON, Wis. (AP) - Startups across the country could soon get a boost thanks to changes in federal rules that will make it easier for them to find local investors.

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In the past five years, more than 30 states have legalized state crowdfunding, an offshoot of equity crowdfunding that allows small companies to sell stock but limits the sales to residents of their own states. Fewer than 200 companies have tried it, partly because most are prohibited from sharing links to their crowdfunding campaigns on social media, crowdfunding's primary fuel.

That restriction will be lifted once states incorporate into their laws modernized federal rules taking effect Thursday.

Supporters of state crowdfunding say part of the appeal is that local investors can help grow local companies. But it's risky for investors since many startups fail.


WDIO

Copyright 2017 The Associated Press. All rights reserved.

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