Varieties of MobCraft beer are shown earlier this year. The craft brewery makes one small batch each month, from ideas submitted by the public, who then vote on which one they would most prefer. Credit: Mark Hoffman

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There's a good chance the first company to use Wisconsin's newly implemented rules allowing investment "crowdfunding" will be, fittingly, a brewer.

MobCraft Beer, a Madison firm that cooks up such sudsy exotica as Mayan Chocolate Chili Ale and Blood Orange Tea Weizen, is poised to open the spigot and tap into what it hopes will be a free flow of investment from ordinary Wisconsinites into Wisconsin business.

"It's pretty fun being on the cutting edge," said Henry Schwartz, one of the three young founders of MobCraft.

The company already has made a name by "crowdsourcing" its brews based on suggestions from beer fans and votes on social media. Now it's ready to seek an as-yet-undisclosed amount of money through a just-authorized web-based system that opens an investment door formerly closed to all but the rich and the well-to-do.

Wisconsin is one of the first states to allow private companies to sell stock over the Internet to people of modest means. Legislation allowing such investment crowdfunding passed with bipartisan support last fall and was signed into law by Gov. Scott Walker. After rules were put in place, the law took effect June 1.

"It's an exciting time for sure," said David Dupee, a Milwaukee lawyer-turned-entrepreneur who registered Wisconsin's first investment crowdfunding web portal, CraftFund.

CraftFund will specialize in offerings in craft food and drink makers. MobCraft is among those that have joined CraftFund's site.

For decades, private firms seeking to raise money by selling stock have faced demanding regulatory requirements, and they generally have been barred from selling to non-wealthy investors.

Two years ago, though, federal legislation was enacted to ease those restrictions and allow crowdfunding — raising capital by gathering small investments from large numbers of people — as a way to help start-ups grow.

It basically takes the idea of websites like Kickstarter into the investment realm. Many nonprofits, arts projects and even businesses have promoted themselves on Kickstarter and raised money not with the promise of a return — that's been illegal — but simply from donations or in exchange for small gifts.

While the Securities and Exchange Commission has yet to issue the regulations implementing the federal investment crowdfunding law, Wisconsin and a few other states acted to allow the practice within their boundaries.

Under the law here, Wisconsin businesses can sell up to $1 million in stock to state residents. A business cannot accept more than $10,000 from an individual unless the person meets income or net-worth standards. A company can sell up to $2 million in securities if it makes a financial audit available.

Critics of crowdfunding fear it will open the door to fraud and exploitation of unsophisticated investors. Advocates see it as democratizing investment and providing a boost to local businesses.

"'Buy local' is a very compelling and strong movement right now, and I think 'invest local' is the next logical phase of that," Dupee said. "And there really (hasn't been) a mechanism for the general public to invest local. This is the first."

A forerunner of crowdfunding, the Fund Milwaukee group spearheaded by local developer Juli Kaufmann, has shown there is significant interest here in investing in local businesses.

As it happens, several of Fund Milwaukee's investments have been in food and beverage operations, the same field Dupee plans to plow.

He thinks crowdfunding will appeal particularly to millennials — people now in their teens and 20s — who are web savvy and already are the main users of sites such as Kickstarter.

"Millennials really come at investment differently, and they're not as attracted to kind of the traditional investment vehicles out there," Dupee said.

Schwartz said he is not allowed to say how much MobCraft plans to seek through crowdfunding. The small firm, which has been working out of Madison's House of Brews microbrewery, plans to use the money to move into its own location, he said.

Like partners Andrew Gierczak and Giotto Troia, Schwartz is 25, and completely comfortable in a business that combines the millenniums-old practice of brewing with the rapidly evolving world of the web.

"Everything we've done with the company has been not the norm," he said.

Dupee, 32, whose legal background includes insurance litigation and helping investment advisers navigate securities regulations, believes a lot of capital currently is sitting on the sidelines, and that crowdfunding is going to tap it.

"Investment crowdfunding is obviously a nascent industry," he said, "but I think it's also potentially a big industry."

Crowdfunding launch

Entrepreneurs group Startup Milwaukee will mark the launch of investment crowdfunding with an event on June 12, 3:30 p.m. to 5 p.m., at 96Square, a co-working space at 1101 N. Market St. in the Blatz Wash House. Scheduled are remarks by Lt. Gov Rebecca Kleefisch, David Dupee, and MobCraft. Plus, free beer samples.