Assembly bill would allow for crowdfunding, help small businesses

Picture Courtesy of greenbaypressgazette.com

Picture Courtesy of greenbaypressgazette.com

Last month, I, along with my colleagues Rep. David Craig, R-Vernon, and state Sen. Leah Vukmir, R-Wauwatosa, introduced Wisconsin’s CASE for Jobs Act, Assembly Bill 350, into the Wisconsin Legislature. Popularly known as crowdfunding legislation, this bill aims to add Wisconsin to a small group of states on the cutting edge of providing better access to small business capital.

AB 350 works to reform Wisconsin’s securities laws and allow for crowdfunding in our state as a means of connecting Wisconsin-based investors with Wisconsin-based start-ups and businesses.

While crowdfunding websites like Kickstarter are not new, there are only a handful of states that have changed their laws to allow similar, but more advanced, funding mechanisms on a local level. These crowdfunding sites can serve as a one-stop shop that will allow local investors and small businesses to be connected through Wisconsin-based websites in order to raise capital and offer stock.

AB 350 is commonsense legislation that focuses on jobs by allowing our state’s small businesses to be unshackled from New Deal era ideas and use 21st century technology to offer stock in their business as a way to gain capital and investment dollars. People are more likely to invest in a business they know and trust than one they’ve never heard of, and this legislation will allow Wisconsin dollars to stay in Wisconsin — not Wall Street.

Currently, in order to sell securities, Wisconsin law requires registration with the Department of Financial Institutions, which can cost up to $30,000 in attorney’s fees unless you qualify for a registration exemption. The high price associated with this traditional method of offering stock places too much of a burden on our small businesses. By amending and creating exemptions for our state’s job creators, AB 350 will give businesses access to the capital they need.

This legislation also works to protect the consumer and requires disclosure forms to be filed with the Department of Financial Institutions. Examples of disclosure documents include a company’s business plan, terms and conditions being offered to investors, risk statements and litigation disclosure. Not to mention, investments received by a business are held in escrow until their goal is met, so if a goal isn’t reached, the money is disbursed back to the investors. I also plan on offering an amendment to the bill that will strengthen protections for investors and offer more transparency in the process.

AB 350 is going to create jobs in our state by allowing more of Wisconsin’s small businesses to attract investment dollars, and the state won’t pay a dime. I remain committed to finding ways we can keep Wisconsin dollars in our local economies, and what better place than to invest in our friends, neighbors, and our Main Streets.

AB 350 was introduced into the Assembly Committee on Financial Institutions and is expected to have a public hearing on Sept. 25.

State Rep. Chad Weininger, R-Allouez, represents the 4th Assemby District in the Wisconsin Legislature.

Source: Chad Weinninger – greenbaypressgazette.com

Link: http://www.greenbaypressgazette.com/article/20130915/GPG0706/309150324/Guest-commentary-Assembly-bill-would-allow-crowdfunding-help-small-businesses

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