THE GIST
BrewDog’s first-ever U.S. round of Equity for Punks, the company’s crowdfunding apparatus, didn’t quite live up to the Scottish brewery’s lofty hopes. Last week, the company closed the round, which was launched in August of last year, having raised $7 million to aid in the build out of a destination brewery in Columbus, Ohio. Though far from chump change, the company had set out with the express hope of raising $50 million in order to shatter its own previous crowdfunding record.
WHY IT MATTERS
Despite the $43 million gap between hope and reality, the company says that, over the course of the last year, it still added more than 9,000 shareholders in the U.S. However, it seems this new swath of investor “punks,” as they’re called, came not in steady waves over time, but in couple of huge droves separated by periods of waning interest.
The company first introduced Equity for Punks to the U.S. on Aug. 4 of last year as an attempt to break its “own equity crowdfunding world record of $35 million” in service of building a beachhead brewery in the Midwest. And the campaign got off to a torrid start, raising $1 million in its first three days.
“This unprecedented response to our first crowdfunding round in the States shows the demand for our beer in America,” the company said at the time, “and sets us up with a community of like-minded individuals ready and waiting to help us make our US business an explosive success.”
That scorching rate was unlikely to be sustained in the first place. But last week, in announcing the round had closed, the company said it added 2,000 additional shareholders—of 9,000 new punks total—in the month of July alone. It added further that in that same month it raised half a million dollars over a 24-hour time period.
Added up, the company essentially raised $1.5 million, or a fairly crazy 21% of its total haul, over a four-day span (three days in August of last year, one day in July of this year). It would be difficult to say what happened in the interim, but GBH asked one “punk” in the UK whether he felt investing is worth it. His response:
“No. I feel it’s grown to a point where the community element of the program has got too big, so adding to it will only further diminish the return.”
That, of course, is just one punk’s opinion. And the company had other tricks up its sleeve to spur U.S. interest. In November, it launched “BrewDog’s Big Bet,” through which investors could double, or lose, their equity on a literal game of roulette. That move only followed a promise to build a brewpub in any American city where 500 or more people invested.
Meanwhile, this past March the company launched a separate crowdfunding effort altogether, using IndieGoGo in hopes of raising a comparatively paltry $75,000 to build out its hybrid sour beer facility and hotel. It’s tough to compare the two projects given the difference in scale of what it was asking from drinkers, but that project obliterated its goal, securing more than $324,000. It’s worth noting, too, rewards for donors to that project didn’t include equity, but rather the chance to unlock tours, design actual beers, and even take over the entire facility for a night for things like weddings and corporate events. Even beyond that, the company has proven mightily adept at getting consumers to open their wallets generally speaking, not just at the store, but through their computer screens.
So fret not for BrewDog and its measly $7 million. Beer is shipping from its Columbus operation as of last month, a $43 million whiff be damned. And they've still got that private equity money. Plus, if history is any indication, you can be sure they'll find a new way to ask people for money soon enough.
—Dave Eisenberg