Law change could boost little-used state crowdfunding laws

By Cara Lombardo, Wisconsin State Journal

Videoscore_wsj_webA former Green Bay Packers player whose consulting business has connected 400 high school athletes with college teams got a lesson in federal securities law when he sought to raise money for a new smartphone app.

Videoscore owner Darryl Ingram decided to seek Wisconsin investors through a process called state crowdfunding, a relatively new and underused tool available to small businesses. What he didn’t realize was the system bans any ad that can be seen by an out-of-state resident, including solicitations through Facebook and Twitter, so his effort to raise $100,000 failed to land even a single taker.

Modernized federal rules that took effect this week lift such restrictions on using social media for state crowdfunding, provided the states incorporate the changes into their own laws. Ingram, of Racine, says it will make it much easier for small businesses like his to raise money from in-state investors. Read more …

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