This blog began out of a strong conviction that craft beer is a powerful medium for community and placemaking. It is therefore a privilege to announce an exciting new venture. Drum roll….
My friend and I are about to launch CraftFund, a company that we believe is the first crowdfunding platform dedicated to craft beer. Crowdfunding is the means of raising smaller amounts of capital online from a larger group of people. Think Kickstarter. Kickstarter is an online platform that helps creative projects get off the ground through online contributions from the general public. In exchange for “donations”, the crowd receives rewards and perks. For the startup, it is a great way to secure seed money. Perhaps more importantly, it’s a means to test an idea before committing significant resources. By rallying a community around an idea, a startup can go to market with the peace of mind that it is backed by an army of brand advocates. For the donor, crowdfunding is a great way to learn about new projects, receive cool stuff, and feel like a part of the creative endeavor.
It’s no surprise that breweries in planning are turning to Kickstarter to help get beer to market. According to my calculations, as of July this year approximately 25 breweries in planning had successfully raised close to $600k on Kickstarter. Crowdfunded brewery projects will likely continue to increase for two reasons. First, Kickstarter has only been around for a couple of years and the benefits of crowdfunding are only just being realized. Second, the number of breweries in planning are increasing. The Brewers Association estimates that there are now over 1200 breweries in planning across the United States as opposed to 700 a year ago. That’s a lot of quality beer trying to get to market. However, access to capital and solid messaging is critical for these projects to get off the ground. Enter Kickstarter.
You might be asking, if breweries are already using Kickstarter, why is there a need for yet another crowdfunding platform? The simple answer: community. Hanna Laney of Great Divide Brewing recently described the strong sense of community craft beer fosters:
Let’s forget for a moment that craft beer seems to be thesaveur de la semaine among hipsters far and wide. Even despite its growing popularity, craft beer means community. It’s more than just a bubbly, trendy libation. It’s a statement. A vote. Supporting craft beer means stronger connections to our communities and to each other.
The uniqueness of craft beer and its community is deserving of an equally unique platform. On a very simple level, CraftFund is a direct outcome of our frustration over the mild inconvenience of having to search for “brewery” on kickstarter. We’d love to see a single platform that shows off all the cool beer projects going on around the country. And we’re willing to wager that we’re not alone. Ultimately, we desire to see an online community of craft beer enthusiasts dedicated to funding new breweries and craft beer products that create a greater sense of place
But funding startups is only the beginning. The newly enacted JOBS Act will for the first time allow the general public to invest online in small businesses in exchange for equity (“equity crowdfunding”). Previously, equity crowdfunding was only available to the very wealthy. Because of the JOBS Act, businesses will soon be able to raise up to $1million per year from the general public through online portals registered with SEC. While the law is being finalized and the specifics remain unknown, we can’t help but get excited about craft enthusiasts having the opportunity to purchase shares in their favorite brewery. We want to be prepared to make this a reality once it becomes legal.
For established breweries, equity crowdfunding will be an alternative way to finance expansion and build a brand. In an age where banks remain cautious and shelf space shrinks, the importance of this new source of funding and messaging cannot be overstated. Moreover, breweries will be able to turn to loyal customers with a vested interest in the product. One thing I love about the craft beer industry is the relatively small gap between producer and consumer. Through tastings, social media and events, brewers work hard to create experiences for their customers. Equity crowdfunding could be a game changer in this regard as breweries will be able to structure unique experiences around their public offerings. One need only look to Scotland and BrewDog’s Equity for Punks campaign to get a taste for the potential to build community through equity crowdfunding. This is what craft beer is all about. We’re passionate about making it a reality here in the U.S. We’d love for you to join us.