BrewDog enjoys success with its “equity for punks” crowdfunding scheme
Brewdog craft brewery sold its first bottle of beer in 2007 and opened its first bar three years later. It has since grown to become one of the UK’s most celebrated craft brewers and even won the record for the world’s strongest beer (the 55pc ABV End of History). In keeping with its general non-conformist ways, Brewdog has once more elected to beat a somewhat different path when it comes to fundraising for its ambitious expansion plans.
Brewdog's “equity for punks"
For the third time, Brewdog has invited the public to invest in its “equity for punks” scheme in a share offer that values the company at £111 million. The scheme offers both fans and investors the opportunity to buy equity in BrewDog for £95 a year.
Since June, 2013 when the scheme was first rolled out, it has generated over £3 million and become one of the UK’s most successful equity crowdfunding schemes ever. Co-founder James Watt says that more than 10,000 individual investors have bought shares in the firm and he is ecstatic with the success so far.
“Raising £3 million in just two months demonstrates the epic support behind the craft beer revolution,” he says.
“Equity for Punks is rewriting the rules of business finance and it’s putting our customers’ right at the heart of our operation.”
Interestingly, apart from offering a share of equity in the company, investors and fans are also offered discounts in BrewDog bars and the chance to attend the company's annual general meetings.
“It’s about so much more than raising finance,” Watt says.
“It builds this culture and community around what we do, locks in our best customers and takes advantage of the interconnectivity that social media allows you to have with your audience.”
In regard to fundraising for its expansion plans, the founders of Brewdog are eager to minimise reliance on the “pretentious investment bankers” and venture capitalists
“We spoke to a few VCs and had a lot of offers,” says Watt. “It just feels like selling your soul to the devil – there are so many conditions, so many constraints.”
With the impressive amount raised through the equity crowdfunding scheme, it looks as though the company has successfully eliminated the need for venture capitalists.
Some of the capital raised will be used to scale up production and add to the company’s portfolio of bars in the UK and overseas.
“We are also looking to expand our bar division into Japan, Brazil and India this year, with more countries on the horizon in the next few years too, as well as also expanding the UK bar division, in which we are hoping to open at least four new bars in 2013,” reveals Watt.
The brand will also attempt to break into America.