“We went through bank after bank. They couldn’t justify giving out a loan to two guys starting a business.”
Tecumseh Brewery was founded by two entrepreneurs, Tim Schmidt and Kyle Dewitt.
During a conversation about their future, while they were both employed at Ann Arbor’s Blue Tractor BBQ & Brewery, they decided they wanted to strike out on their own. Brewer Tim Schmidt had years of experience brewing a diverse number of beers capturing over 20 medals for the World Beer Championship. Kyle had 5 years of experience managing a brewery bar. While the pair had plenty of experience what they did not have was access to capital. Banks have zero interest in risky loans these days and without a big cash infusion their future vision of their very own craft brewery looked rather bleak.
Enter the Michigan Invests Locally Exemption or MILE Act, signed into law in December of 2013. Leveraging this intrastate crowdfunding exemption Tecumseh brewery was able to raise funding to help launch their startup. The funding included backing from a single investor that kicked in $120,000. Once they hit their threshold funding level they were able to raise a loan of $200,000 from a local bank.
Chris Miller, Adrian economic development and Michigan investment crowdfunding advocate stated he was inspired by Amy Cortese and here Locavesting book;
“Part of the strength of intrastate crowdfunding is for us to have an impact on our own communities,” Miller stated. “It satisfies your soul and your heart and is healthy for your pocketbook.”
While investing in startups is a risky bet, some data indicates that a highly diversified portfolio in early stage companies may perform quite well. While accredited crowdfunding has been legalized since September of 2013, the SEC has been slow to push forward with rules that allow the masses to choose if they want to invest in crowdfunded securities. This delay has compelled an increasing number of states to take matters into their own hands. While evidence of success, or failure, will take some time, a growing number of public officials are recognizing the potential positive economic impact of facilitating access to capital for entrepreneurs.
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