Video transcript: There are new ways to get capital. You just have to find the right pitch.

On screen:

The Brief for Business. Presented by Vox Creative. Sponsored by Chase for Business.

A woman sits at a long desk.

Host:

Recent legislation has opened new avenues for companies considering crowdfunding. Instead of just soliciting donations, legal changes now permit some companies to actually sell shares. And the marketplace has experienced huge growth, going from $880 million raised in 2010 to $34 billion raised last year.

On screen:

Bar graph of crowdfunding growth rate over the last five years. $16 billion in 2014, $34 billion in 2015.

Host:

Starting in early 2016 under President Obama's JOBS Act, companies can do this nationwide.

On screen:

Henry Schwartz, CEO Mob Craft Beer.

Henry stands in a bar with a dark beer.

Henry:

Crowdfunding is a solution that really filled in that gap where we probably could have went out of business running out of cash.

On screen:

Henry fills a tall, cylindrical container from tap.

Host:

This is Henry Schwartz of MobCraft, a Milwaukee micro-brewer, and the first company to use equity crowdfunding in Wisconsin.

Henry:

I was a business student and I learned about this business model of crowdsourcing, where you take input from the crowd and turn their ideas into an actual product. Expanding, you know, upon this idea of brewing out there, off-the-wall kinds of beers, and thought, why don't we put it up to the crowd to come up with those beers?

We decided to start crowdfunding for the next expansion of our brewery when new legislation passed in Wisconsin to allow for the sale of equity without having to go through the SEC and making a public offering. So we thought, since our beers are created by the crowd, it'd be awesome if our company was also owned by the crowd.

Our investors can be out on the market and say, you know, I'm part owner in this beer company. It fit really well with our business, and we're at a point where we want it to grow, so I figured, why not take advantage of something new?

On screen:

An image of the U.S. Map is shown with states filling in blue by the year. The title, "Growth of equity crowdfunding" hangs above the image.

Host:

As big as crowdfunding has gotten, it's only going to keep growing. Equity crowdfunding became legal in Kansas in 2011, the first state to allow it. And MobCraft worked under a similar state law in Wisconsin, but now, with the JOBS Act in effect on a national level, businesses across the country can sell stock to regular investors everywhere.

The trick is knowing what kind of crowdfunding is right for you and when is the right time to use it. When done right, crowdfunding can be a powerful tool in your financing mix, and a great way to boost your business to the next level.

[Music playing]

On screen:

The Brief for Business. Presented by Vox Creative. Sponsored by Chase for Business.

Find business news, stories, insights, and expert tips all in one place at chase.com/forbusiness.