Great Investment – The Start-Up Investor

 

The Scottish craft beer brewer BrewDog is currently looking for – not only for German standards breathtaking – £ 25 million. In the first 20 days could be collected £ 5 million . That’s amazing even for BrewDog’s standards. In 2013, the boys needed six months to get a comparable amount of investors.

 

Founded in 2007 by Martin Dickie and James Watt, BrewDog is currently Britain’s fastest growing food & beverage brand. The company with 365 employees not only brews its own beer, but also sells it via its own sales channels such as the online shop and its own bars, 28 of which have already been opened worldwide. BrewDog beer is already exported to 55 countries today.

BrewDog as a blueprint for crowdfunding

 

BrewDog as a blueprint for crowdfunding

 

The fact that Scottish brewers can raise a lot of money from the crowd in short periods of time should set an example for other companies that are considering crowdfunding. In many ways, the case can also serve as a blueprint for your own campaign. BrewDog has a few features that make it easier for the company to raise money that other companies may not own.

First of all, BrewDog has a B2C business model in the consumer goods sector , which means a high level of crowdability . This, of course, is a quality that other companies can not easily adopt. The business model should not have to change because of the desired refinancing type. It also helps that Martin and James like to be rebellious, for example, by advertising crowdfunding financing and wanting to get involved with the traditional finance industry :

“Crowdfunding should no longer be seen as a niche alternative, but a proven, workable option for those libertines and change-makers who want to shake up the status quo.”

Both are well received by crowd investors. The rebellion must already fit the concept of the company. If the German Post suddenly came back rebellious, that would hardly attract (positive) attention.

 

BrewDog as a financial investment

 

BrewDog as a financial investment

 

As far as the naked numbers are concerned, BrewDog has some positive points on its side. They have grown rapidly over the last few years. In 2014, it was 64% in sales. It is foreseeable that the company will continue to grow. Alone because the two Scots are absolutely on the marketing side. For evidence, see here , here or the pitch for the current campaign . I knew this then very small Scottish brewery because of its marketing before I ever saw or drank a BrewDog beer. The associated brand and its own distribution channels also speak for BrewDog. The expansion into America, for which an own crowdfunding campaign is already in the starting blocks, also stimulates the imagination.

The key question is: will it be worthwhile for an investor to have bought for the price today? With a price of £ 47.50 per share, BrewDog is currently valued at £ 305 million. For a company with a turnover of £ 29.6 million in the past financial year, this is a hefty price tag despite growth rates of around 70%. The fact that the company has not described financial planning in the prospectus (or anywhere else) does not necessarily give you a better basis for the valuation.

 

Further incentives for investment

 

Further incentives for investment

 

The fact that BrewDog has already conducted three crowdfunding rounds and tied in a crowd of more than 12,000 investors through its own investor side has enabled it to launch its own funding on the investor’s homepage in addition to the ” official funding ” on CrowdCube. The founders also use the network of investors and offer a very comprehensive referral program. From five recommendations you get a book and three bottles of an exclusive Milk Stout. Subsequent levels 10, 20, and 40 referrals each receive the previous level package and two additional rewards. The ten investors with the most recommendations get the full BrewDog package and the currently strongest beer in the world, The End of History .

How the prospectus creates transparency about how the funds are used also convinces me. It describes how the funds are to be used and also in which order the projects will be realized (or which projects will not be implemented if the full £ 25m do not come together). Each project and its benefits will be described separately in the Prospectus.

The (in my opinion) decisive incentive to invest, however, are the perks : £ 10 Beer-Bucks (money that can only be used in BrewDog bars), a birthday beer per year, discounts in the online shop and bars, invitation to HV and, depending on the size of the investment, you become a member of the beer club Abstract Addicts and receive a free subscription to the Equity Punks BottleBox Beer Club for a year. The whole thing makes sense, of course, if you like the beer too. After my trip to the craft beer festival in Frankfurt in September, I can definitely answer that for me with yes !

Conclusion

 

BrewDog can prove financially a good investment, but it does not have to. The probability does not seem high enough for me to invest under normal circumstances. However, I decided to draw the stock to participate in the BrewDog project and to accompany the boys on their journey. An investment in BrewDog is shopping in a culture and an attitude. Besides, I think I’ll get at least a big part of my investment over the perks. Here I just allow myself to use the fun investor in me.

Much more important than the question of whether the investment is worthwhile, however, is that BrewDog shows how money can be collected by the crowd in an intelligent way. What is your attitude towards BrewDog and its crowdfunding? Will you invest? 

 

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