What better place than a national hotbed for beer and cheese to open a crowdfunding platform geared specifically to food and beverage establishments?
That is what CraftFund LLC Founder David Dupee was thinking when he announced the CraftFund investment crowdfunding platform in Milwaukee in late September. Focused on food and beverage establishments along with related real estate properties, CraftFund aims to capitalize on local foodies passion for their favorite haunts by turning them into owners and advocates.
“I became aware of the federal JOBS Act through my day job at the time,” Mr. Dupee, who has a legal background in securities regulation and compliance, said. “As a big craft beer fan, an immediate light went off as far as equity crowdfunding potentially meeting a pent up consumer demand for ownership stakes in local food and drink companies that rewards crowdfunding can’t address.”
People in Wisconsin who enjoy a burger and a pint can back the type of place they would like to spend an evening at up to $10,000 each year. With ownership now consisting of more than just an emotional tie, CraftFund is counting on these instant advocates creating momentum leading to successful restaurant operators and fair ROI for supporters.
And what better place than Wisconsin, which was the first state to embrace intrastate crowdfunding, thanks in part to the efforts of entrepreneurs like Mr. Dupee.
“I quickly became disenchanted with JOBS Act Title III and turned my focus to working with the state legislature on a Wisconsin solution. Wisconsin was the first state to create a state exemption through the legislative process. To me, a state exemption makes a lot of sense for us because most of the investments on our site will be local investments. The new law has strong support from state and economic development agencies and an ecosystem is developing to position Wisconsin as a leader in equity crowdfunding.”
Wisconsin is also known to possess a strong sense of community, and given the number of jobs which depend on the hospitality sector, the table was set, so to speak.
“Wisconsin is ranked as one of the top states for a buy local mentality,” Mr. Dupee explained. ” I think part of this is the importance of food and beverage industry in this state. Restaurants are the largest private sector employer. Wisconsin is also top ten in many food production categories and eighth in breweries per capita. But also the concept of community ownership is already entrenched in this state where its most beloved professional sports team(the Green Bay Packers) is owned by fans.”
People wishing to participate with CraftFund need to create an online investor account and prove they reside in Wisconsin before they can see offerings. Each individual can invest up to $10,000 in Wisconsin companies, with those funds residing in escrow in a state bank until the minimum is reached.
CraftFund is another example of crowdfunding with community benefit, where people can yes earn income, but where they can also contribute to a better community, whether it be by creating jobs, countering urban blight or by having a say in the type of atmosphere they live and work in. Mr. Dupee recognizes how scarce this opportunity is today.
“This will be one more way for people to direct the future of their communities. For the general public, this has typically taken the form of casting a vote in a ballot box. Now the general public can also vote with their wallets by literally investing in the future of their communities.”
This is one reason why crowdfunding has so quickly taken root, and why it is probably not going anywhere.
“This absolutely is part of equity crowdfunding’s appeal,” Mr. Dupee said. “The regulations that are making equity crowdfunding possible represent a change in decades old laws that have precluded people from investing in local companies they know and are passionate about.