Many people have heard of, or have even used, the popular website Kickstarter, which allows members of the public to donate money to fund businesses, artistic projects, and other ideas. Right now the public only gets a small trinket of appreciation and enjoyment of being a part of the creative process for their donation, but a bill that Rep. David Craig (R-Town of Vernon) is preparing to introduce would modify Wisconsin’s security law to allow investors to get ownership and a potential return on their investment.
State Representatives David Craig (R-Town of Vernon) and Chad Weininger (R-Green Bay), and State Senator Leah Vukmir (R-Wauwatosa) held a news conference on the introduction of Wisconsin’s CASE (crowdfunding and securities exemptions) for Jobs Act on August 13, 2013 at the state Capitol.
The CASE for Jobs Act, CASE standing for Crowdfunding and Securities Exemptions, would expand crowdfunding in Wisconsin by creating a state securities exemption that would allow Wisconsin businesses to raise up to $1 million from both accredited and non-accredited Wisconsin investors without an audit, or up to $2 million if the company agrees to be audited. Non-accredited investors would be able to invest up to $5,000 in a single crowdfunding campaign.
In addition to creating crowdfunding, the bill would alter the definitions of accredited and institutional investors and modify existing exemptions including: the maximum offerees exemption, the limited security holders of small Wisconsin issuers exemption, and would include bank holding companies in the current bank exemption.
Click here to read a more thorough explanation of the bill prepared by Wisconsin’s non-partisan Legislative Council.
The legislation is similar to a federal law passed last year that allows for crowdfunding campaigns to raise up to $1 million from non-accredited investors, who will receive company stock in return. (The law has not had much impact yet because the administrative rules implementing the change have yet to be written.) Other states, including Georgia, Kansas, North Carolina and Washington, have also pursued this sort of legislation.