MobCraft Beer is First Business to Launch Campaign
As of Wednesday, September 24th, 2014, intrastate equity crowdfunding in Wisconsin is officially underway. The Madison microbrewery MobCraft Beer, in conjunction with Monona State Bank and CraftFund, is now accepting pledges online from Wisconsin residents. Wisconsin intrastate equity crowdfunding has been off to a very slow start and for a reason: federally chartered banks are forbidden to participate. The restriction was intended to help local banks, not delay equity crowdfunding, and Monona State Bank broke the mold by declaring it would support MobCraft’s campaign.
For those who didn’t know – crowdfunding has been legal in Wisconsin since June 1st. Their choice to disallow Chase, BMO Harris and the other big banks to participate is not a practice shared by the other 11 intrastate equity crowdfunding states. In fact, according to New York Attorney Georgia Quinn, no other states in the proposal stage of intrastate equity crowdfunding are considering restricting big banks either.
Wisconsin has several rules similar to SEC federal guidelines, but not all are the same. For example, businesses can only raise $1 million per year but that total can jump to $2 million if they make a financial audit available. As for investors, non-accredited investors are allowed to pledge up to $10,000. SEC proposed guidelines limit annual investments to $5,000 for individuals making under $100,000/year, but investors who make more than $100K are allowed to invest up to $10,000.
As for MobCraft Beer’s intrastate equity crowdfunding offering, they are trying to raise between $250,000 and $500,000. The equity offered is in series B common shares and the minimum purchase available is 150 shares. The company is hoping to close the funding round in 90 days, which is the longest time period for proposed federal equity crowdfunding campaigns as well. If the target amount is not reached, all funds will be returned, another similarity to the SEC rules.
Milwaukee lawyer David Dupee registered the hosting site Craftfund, the first of its kind in Wisconsin. He thanks a model escrow agreement from the Wisconsin Bankers Association for ushering in the deal. “Since then we have seen a lot more interest from banks.”
MobCraft Beer CEO Henry Schwartz is also excited about the recent escrow agreement: “It has been extremely difficult to get banks to see this as something that’s new and innovative and not be scared of it.
Nobody can argue with that, especially when you consider intrastate equity crowdfunding has been legal in Wisconsin for almost four months. But now that MobCraft Beer has an open campaign, any craft beer lover in The Badger State can invest in a Madison microbrew and support a small business. Now that’s something to raise your glass to.
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