fb-pixel Skip to main content

Massachusetts legalizes investment crowdfunding

Online crowdfunding operations where investors take a small stake in a company are now legal in Massachusetts.

Secretary of State William Galvin said Tuesday that Massachusetts rules had been updated to allow for accredited investors to take a stake in publicly-advertised fundraising rounds. The new rules don’t have anything to do with websites such as Kickstarter and IndieGoGo, which accept donations from the general public.

“This exemption will enable Massachusetts startups and entrepreneurs to more easily use the Internet to raise capital which I hope will, in turn, give a boost to the Commonwealth’s economy and foster job growth here,” Galvin said in a statement.

Advertisement



Brian McNiff, a spokesman for Galvin, said the rule change brought Massachusetts in line with other states and the federal government.

The Massachusetts rules allow companies to raise up to $1 million in solicitations that can be advertised online, or $2 million if the company’s financial statements have been audited. The law limits how much of their own money investors can put into a single venture.


Jack Newsham can be reached at jack.newsham@globe.com. Follow him on Twitter @TheNewsHam.