BrewDog Brewery's £4 Million Equity Strategy

      

With equity financing via crowdfunding eagerly awaiting approval in the U.S., many start-ups ready to put their business before the crowd are putting together their strategies.  Many European businesses, most pointedly those in the U.K., have already flourished with equity crowdfunding.  Among the most noted success stories is U.K. brewery company BrewDog.  The BrewDog empire has expanded with astonishing speed, partly due to their massively successful equity crowdfunding campaign dubbed “Equity for Punks.”  Brew Dog currently consists of a dozen bars, an eco-friendly brewery and a universe of craft brews.  They’ve leveraged equity crowdfunding a total of three times, allowing their growing following of fans and admirers to own a stake in the company.  The first round sold out quickly, drawing 6,000 devotees in 2010. The number rose in  2011, amassing £2.2 million and they’re presently taking on round three.  So far it’s been the most lucrative round yet, passing £2.5 million of their £4 million goal, with £1 million raised in only 24 hours. 

                Equity for Punks is a new, edgy equity campaign epitomizing the kind of innovation that crowdfunding has attracted since its inception.  Its unparalleled success has a lot to teach U.S. start-ups as they construct their own strategies for amassing capital through the crowd.   Crowdlanding asked Brew Dog about their success, and what tips they have for other punk businesses turning to the crowd.  More advice from this fast-growing equity empire will be featured in upcoming posts.

BrewDog attacks conventional finance

How to organize, distribute, and reward shares.

Obviously, as with any equity offering, you don’t want to commit more ownership of your company than you’re willing to give away.  Equity crowdfunding has a distinct advantage over traditional funding resources, however.  Instead of sacrificing a percentage of your hard-won company to one or several investors who are apathetic to its development past profitability, company ownership goes to hundreds or thousands of like-minded fans who are passionate about what you’re doing and care about your company’s success.  Though they may not have the expertise and guidance that venture capitalists can offer, they imbibe a foundation of enthusiasm and support.  Crowdfunding employs large masses instead of a small group like traditional funding, so the perks and opportunities the shares offer are going to be different.  Brew Dog rewards their biggest fans with some advantages of traditional shares, as well as list of perks rewarding their love of the brew.  “Anyone who invests in Equity for Punks owns part of the company, brewery, bars and beers—you get a say in how the company is run, and can vote on key decisions on the Equity Punks forum and at shareholder events,” said Sarah Warman, representative of Brew Dog brewery.  “Equity Punks” also get lifetime discounts at bars and through the online store, store credit and an invitation to their AGM, which has become a legendary event among beer enthusiasts.  Not only does this arrangement make Brew Dog’s fans feel like part of the family, but it gives Brew Dog a direct resource to draw on when answering questions regarding market preferences, choices and interests, a pulse which many companies pay steep prices in market research to get a read on. 

Advertising the Offering

BrewDog's founders and fans

Even more surprising about their almost 5 million pound equity offering is that Brew Dog never used advertising to attract fans.  Brew Dog’s “Loyal allegiance of hugely passionate beers fans and online community has been the driving force behind it’s success” said Warman.  Brew Dog’s investors are large and small and representing a range of regions in the UK and beyond, but they have one thing in common; they love Brew Dog beer.  This strategy ensures good initial relations with investors, however it sets a high bar for upcoming decisions.  With love, loyalty and, now, money invested into Brew Dog, supporters have a zealous interest in seeing their opinions properly represented. 

To find out more about BrewDog, Equity for Punks or order their award-winning craft brews, visit their website. 

 

Next; BrewDog talks audience, target markets and legal details with their successful equity strategy.