Now that the Securities and Exchange Commission has proposed rules on crowdfunding, private companies looking for investors are one step closer to being able to pitch to the general public. The team behind Cardinal Spirits, a new craft distillery based in Bloomington, Ind., will raise a glass to that.
Its founders say Cardinal, poised to be just the fourth craft distillery in Indiana when it opens in 2014, also expects to be the first in the state—-and among the first nationwide—to use a variation on crowdfunding.
(Read more: CNBC explains crowdfunding)
In late August, the distillery closed on an $850,000 round of funding through Localstake, a new online marketplace that connects would-be investors with local private companies in search of cash. Now about a third of the company is in the hands of bar and restaurant owners, musicians and others who don't fit the typical investor mold.
"We have people from all different industries," said Adam Quirk, chief executive of Cardinal Spirits. "Our average investor is a small business owner in Indianapolis or Bloomington, … and there's a good amount of them that have not invested in private companies before."
It's crowdfunding, sort of.