March 2, 2016 – Whether your clients are aiming to start, merge, or buy a business, they need guidance about the applicable federal and state laws and regulations. They may even need to know the new state and federal rules regarding equity crowdfunding.

You can help with all of that when you invest in the newest edition of Securities, Mergers, and Acquisitions in Wisconsin, written by Wisconsin attorneys who make it their business to know the ins-and-outs of securities and business law.

What is Equity Crowdfunding?

If you live in Wisconsin, odds are you’ve heard about, visited, or bought from a business – such as a brewery – that creates products funded with capital raised online in small amounts from many contributors, who in return get no more than rights to a limited bottle release or another product-related reward. That’s rewards-based crowdfunding.

But equity crowdfunding is different. As co-authors Scott Brunner and Mitchell Lindstrom explain in their new chapter on crowdfunding in Securities, Mergers, and Acquisitions in Wisconsin, equity crowdfunding is a procedure that "allows individuals and companies seeking capital to make relatively low offerings without adherence to more onerous and expensive registration processes, yet still provides offerors access to throngs of potential investors who might not meet the sophistication or accreditation levels required with other private offering exemptions."

Wisconsin Crowdfunding: A New Tool for Raising Capital Online

For most Wisconsinites, equity crowdfunding – in which investors contribute capital in exchange for stock – is a relatively recent innovation. As of June 1, 2014, the Wisconsin Legislature created a securities exemption for intrastate equity crowdfunding, under which Wisconsin businesses may use Internet sites to offer and sell securities to Wisconsin residents, subject to aggregate issuing monetary limits and individual investment limits, as well as other requirements.

Federal Crowdfunding: An Expanded Option for Raising Capital Online Across the U.S.

Although the federal Jumpstart Our Business Startups Act (JOBS Act) of 2012 served as a catalyst for Wisconsin’s crowdfunding law, the Securities and Exchange Commission (SEC) only recently took final action to implement the JOBS Act by approving rules to allow interstate equity crowdfunding.

These regulations, effective for the most part on May 16, 2016, will exempt securities sold under the rules from certain federal registration requirements. Like Wisconsin’s law, the SEC rules require equity crowdfunding offerings to be conducted through a website or similar platform. Also like Wisconsin’s law, the SEC rules impose monetary limits on businesses and investors. See the SEC’s Feb. 16, 2016, “Crowdfunding for Investors Bulletin” for more information.

Crowdfunding Transactions: Exempt from Registration Requirements, but Still Subject to Regulation

Despite the loosening of regulation of capital-raising efforts, and “despite that crowdfunding offers are unregistered securities,” Brunner and Lindstrom warn that “issuers and intermediaries [still] must follow meticulous federal and state statutes and regulations.”

The co-authors explain the differences between intrastate and interstate offerings and provide an overview of the basic steps to meet the requirements for a permissible crowdfunding transaction.

Continued Coverage of Ongoing Relevant Business-transaction Topics

Although the latest crowdfunding rules may be the most prominent in the headlines, they are not the only securities-related changes addressed in the book.

In 2015, for example, the SEC revised “Regulation A,” which exempts offerings of up to $50 million of securities annually from the registration requirements of the Securities Act of 1933. The latest edition of Securities, Mergers, and Acquisitions in Wisconsin discusses this and other developments in its extensive chapter on federal securities regulations (written by Steven Barth and Jason Hille).

Readers can also learn about:

• Wisconsin securities (blue sky) law, in a chapter by Terry Nelson;

• Wisconsin takeover laws, in a chapter by Hoyt Stastney;

• mergers, statutory share exchanges, and asset transfers, in a chapter by Ryan Van Den Elzen; and

• buying and selling a small business, in a chapter by Shawn Govern and Matthew Hills.

Each chapter includes notes and practice tips, providing special insights from the authors on the topics discussed.

Order your copy of this trusted resource today!

Securities, Mergers, and Acquisitions in Wisconsin, now in its third edition, is available both in print and online via Books UnBound^®, the State Bar’s interactive online library.

To order or for more information, visit the WisBar Marketplace or call the State Bar at (800) 728-7788 or (608) 257-3838.

Subscribers to the State Bar’s automatic supplementation service will receive future updates at a discount off the regular price. Annual subscriptions to Books UnBound start at $159 per title (single-user price; call for full-library and law-firm pricing).