Michael Altman, a corporate attorney in Milwaukee with Michael Best & Friedrich, said state law is very restricting. "Anybody using the state crowdfunding law can’t use the Internet, which can be seen outside the state," said Altman.
The new, federal crowdfunding rules allow everyday people without special certification to invest in startups. Altman said it lets new businesses seek investors from outside the state, using a licensed portal to promote their offering after they've filed with the SEC.
"The SEC has always tried to protect non-accredited investors, everyday citizens, by requiring companies if they are going to raise money to follow very stringent disclosure practices and require a lot of information be provided so (investors) would be protected from what the securities laws were originally designed to protect people from which are fraudulent and those without a lot of information," Altman said.
Madison attorney Dan Gawronski, also with Michael Best & Friedrich, said the federal crowdfunding rules are strict. "They only allow companies to raise up to a million dollars," he said. "And a lot of the individual investing limits of unaccredited investors are indeed lower in the federal law than the state would be."
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