New crowdfunding laws on the state and federal level are best suited to help small businesses only, according to a panel discussion at the monthly Wisconsin Innovation Network luncheon held Tuesday at the Sheraton hotel.

Wisconsin’s crowdfunding bill became law in November 2013, and MobCraft Beer became the first company to take advantage of it, in September of last year. Meanwhile, the SEC issued final rules on Oct. 30 for the JOBS Act, allowing an exemption for crowdfunding transactions.

According to Paul Jones, a member of Angels on the Water, startups that are high-impact businesses that need substantial risk capital, such as Eatstreet, would have “little use” for crowdfunding, especially with unaccredited investors.

“Crowdfunding is a perfectly valid way of raising money for small businesses,” Jones said, “but if you want millions, don’t start with unaccredited investors.”

Calling these unaccredited investors “widows” and “orphans,” Jones warned that their investments would make it hard for startups to acquire money from venture capital firms later on.

Besides MobCraft, only three other companies have attempted to use the state’s crowdfunding laws, according to Deb Fabritz, director of regulations and compliance at Department of Financial Institutions.

That’s because of both the costs and difficulty in soliciting interest associated with crowdfunding, Stephen Dinehart of MoolaPitch.com said.

“(Crowdfunding) is a piece of the puzzle,” Dinehart, who predicted just 100 campaigns in the next five years, said. “However, an entrepreneur needs to use the full suite of tools out there.”