A Boston-area startup has raised more than $3 million in less than 24 hours–but so far, it’s illegal.

Cambridge-based WeFunder, which would help anyone invest small amounts in start-ups, needs Congress to change the law before the company can launch officially.

Although crowdfunding is legal for charities and projects where those donating get no ownership–think Kiva or Kickstarter–currently startups can only take money from accredited investors, such as venture capital firms or venture banks. The Securities and Exchange Commission also limits the number of investors a company can have without going public.

What the pending legislation would do is amend the Securities Act of 1933, which was enacted four years after the 1929 market crash. It was designed both to protect investors and to spur U.S. business.

“The existing rules around who counts as an ‘accredited investor’ are antiquated and wrong,” Dharmesh Shah, founder and CTO of HubSpot, told BostInno. “I can understand the desire to protect blue-haired grandmothers from smooth-talking shysters that will milk them of their $300,000 in retirement savings.  But, that’s not what we’re talking about here.  We’re talking about a maximum investment of $1,000.”

More than 1,100 would-be investors have signed WeFunder’s petition urging Congress to pass the bill, called the Democratizing Access to Capital Act of 2011. (Yes, a lot of the signers are entrepreneurs.) If it’s passed, start-ups will be able to raise up to $1 million through crowd-funding. The company launched Monday hoping to get $100,000 from 100 pledges.

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