CraftFund this week was certified as Wisconsin’s first equity crowdfunding entity under a new exemption that allows businesses to raise money from the public via the Internet.
Previously, companies were only permitted to sell shares to high wealth individuals, so-called "accredited investors."
But recent regulatory changes now allow small businesses to sell shares directly to the general public.
Unlike traditional Internet crowdfunding sources — such as Kickstarter — where investors might get a T-shirt or another token for their money, equity crowdfunding allows investors to actually take a stake in the company.
Gov. Scott Walker signed the Wisconsin intrastate crowdfunding bill into law last fall, making Wisconsin just the third state with such an exemption and the first to create one via the Legislature.
The exemption went into effect on June 1. It allows Wisconsin-based businesses to go online and raise up to $1 million (without an audit) or $2 million (with an audit) from any state resident.
All Wisconsin residents, regardless of net worth, can invest up to $10,000 and receive an ownership stake in a local company.
Among those who lobbied for the bill was the Greater Madison Chamber of Commerce.