Small businesses in Wisconsin would be able to sell stock shares online to potential investors, under a bill from Republicans at the Capitol.
Representative David Craig (R-Big Bend) says existing businesses and start-ups currently face a pile of paperwork and legal fees before they can sell stock and raise money just a single time. Craig says there are plenty of people who want to do this, but the current rules make it too difficult and discourage them from making the effort.
AUDIO: Rep. Craig (:17)
The proposed bill would create a state securities exemption for Wisconsin businesses to raise up to $1 million without an audit, or up to $2 million if the company agrees to be audited. All of the purchasers must be Wisconsin residents.
David Dupee runs a crowd-funding platform out of Milwaukee to raise money for craft brewers throughout the country. He says Wisconsin can be a pioneer in the concept, because only two other states have passed laws that allow crowd-funding.
Dupee notes that the concept is different from the popular ‘Kickstarter’ site. Businesses using that site can only offer incentives or products to potential investors, while the Wisconsin bill would allow for an exchange of equity.
The bill is currently being circulated for co-sponsors at the Capitol.