Wisconsin residents can now show their financial support for local brewery MobCraft Beer Inc., as the company launched its crowdfunding common stock offering based on Wisconsin’s new crowdfunding law.
“Since beer fans contribute to the types of beer we make, it makes sense that they now can invest in MobCraft’s anticipated growth as well,” said Henry Schwartz, co-founder and CEO of the Madison brewer. “Crowdfunding is another way for fans to unleash their inner brewmaster.”
Residents could begin investing in the company as of Sept. 24. The announcement was made at the Bridge Road branch of Monona State Bank, which will hold the funds until they are ready for disbursement.
“We’re really excited about this platform,” said Paul Hoffmann, bank president. “It’s easy for banks to be a part of this. It just makes sense.”
Hoffmann compared the launch of crowdfudning to the origins of the bank itself in 1991, when business leaders from the community gathered together and formed the bank.
“It fits well with our history and our mission,” he said.
The new Wisconsin crowdfunding law took effect June 1 and lets private companies sell stock over the Internet. It allows businesses to sell up to $1 million in stock to state residents, with non-accredited investors putting in as much as $10,000 each. Firms can raise up to $2 million if they make a financial audit available.
It’s similar to other Internet crowdfunding sources such as Kickstarter, except equity crowdfunding allows investors to get a stake in the company.
“It’s a great day for small businesses in Wisconsin,” said state Rep. David Craig (R-Town of Vernon), the author of the law. “There are virtually no limitations to what crowdfunding can do for Wisconsin.”
He suggested it would be good for the farmer looking to buy new equipment or the baker who wants to expand his shop.
Hoffmann said the new law will help build the local economy by offering another financing option for small businesses.
“This might replace the request for a family member to invest in a company,” he said. “In addition to personal equity, a bank line of credit and a Small Business Administration loan, this is another tool to use.”
Schwartz said he and his two co-founders, Giotto Troia and Andrew Gierczak, will use the funds to add staff and purchase a larger location in the Madison area.
“We’d like to hire an administrative assistant, a salesperson and two brewers,” Schwartz said. “We’re in the process of reviewing locations, which should be decided around November.”
He said MobCraft is considering building brand new or buying an existing site. Currently it shares 4,000 square feet with House of Brews at 4539 Helgesen Drive, just east of Stoughton Road and north of Pflaum Road. A new site would be about10,000 square feet, which should meet the company’s needs for the next five to 10 years, Schwartz said.
MobCraft promotes itself as the world’s first crowdsourced brewery.
It creates custom craft beers based on user-submitted recipes. Customers can cast their vote by placing a pre-order of beer they want served. MobCraft produces the beer with the most votes (pre-orders), and the finished beer is shipped to the buyer.
Schwartz said his favorite is Candy for Breakfast, which is a chocolate peanut butter coffee porter, and the Russian Imperial Stout.
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