Brewery Kickstarters

A lot of people think they have a great idea, or know how to run a business, and they just don't. When/if they get funded, then they just don't have the ability to get it going. Did the brewery you support just barely get funded? Or were they pretty far ahead of their goal?

Something from the fall of 2013 is ridiculous though. I'd be contacting kickstarter as well as telling them you want your money back if they can't deliver the rewards.

 

You should name the brewery in question - this community is based upon awareness. There is coming an overpopulation of breweries and it would be useful to know what are the good ones.

 

I wouldn't trust any brewery that tries to raise money on kickstarter. It's nothing more than corporate panhandling.
Not to mention pure greed. If you need to raise money to make and sell beer, take on another investor or get a bank loan. Don't hit up your customers for money in exchange for cheesy merchandise.

 

If crowdfunding was legal it would be a better option IMO. Sorry to hear about your kickstarter experience. I've never had a bad one so far. Shitty for them, hopefully karma comes back and kicks them in the ass, they deserve it. If they're leaving potential return customers out in the cold like that I doubt they'll last long.

 

Numerous examples prove that getting a bank loan for a brewery is next to impossible. Also, finding SEC approved investors can be very difficult in areas without an active VC culture and/or community.

 

"Funding" a brewery through Kickstarter is basically just giving them a handout. Anyone who does it should be aware that is what they are doing. Still, the least they can do is deliver on the gifts they promised in exchange for all that free money. I would contact Kickstarter and ask for your money back, oh, and stop funding breweries through Kickstarter.

 

I understand that but many businesses (breweries or otherwise) have been started by the principals taking out a home equity loan for funding. Tony Magee's book "So you want to start a brewery" is a great read and he tells how he pretty much mortgaged everything to start and grow Lagunitas. And I am not sure what "SEC approved investors" have to do with raising money, these are not public companies we are talking about here.

 

I get that to a point, but in that specific example, how many people these days are going to have enough equity in a property to put together a proper brewery? IMO, there is a reason that people turn to places like Kickstarter: legislation has been passed specifically to allow investors at these types of levels onto the playing field following decades of SEC regulation that was put in place after the Great Depression and that kept them out of the game completely. In other words, legitimate investors turn to crowdfunding sites themselves to look for good investments; so why shouldn't an entrepreneur go there to look for investors?

 

Yeah, not calling them out at this point is leaving potential for others to get screwed over by them too, since they seem to be shitty people. You aren't doing anyone any favors by being nice. Call them out.

 

Of course most of these guys don't have the equity to start a business, but if you don't have enough equity, then don't start the business until you do. Asking for handouts from potential customers, legal or not, is ridiculous IMO. And are those donating money to the cause really investors? Or are they owners of a new key chain or brewery T-Shirt? Investors typically see a return on their investment, and that rarely if ever happens with kickstarter companies.
You make some very good points, but personally I am not fond of Kickstarter businesses.

 

I do see where you're coming from. I would just say that the legitimate investors on crowdfunding sites can easily pick out the serious businesspeople/entrepreneurs from the non-serious ones. But just because these sites are clogged with the latter, doesn't mean the former aren't out there. No need to throw the baby out with the bath-water....

 

I'm not quite as down on Kickstarter as you seem to be, but I do think consumers have to be very wary of Kickstarter. Kickstarter, and other crowd-funding operations, have done some amazing things. However funders can't just want a project or product, they have to be confident the people behind it are experienced and competent enough to follow-through. I also think the start-up brewery should offer funders something of more value or extra perks, beyond over-priced marketing merchandise.

 

Agree. But I'd add that if I'm the start-up and people are willing to fund me in exchange for over-priced marketing merchandise it makes my life much easier :-) and I have no motivation to work harder.

 

I'm extremely down on kickstarter for breweries because in most states, they can't give away the logical result. I'd blow $10 if I got 2 pints when the place opened, but that's illegal in many states. Instead, I can have my name posted on the website and get a keychain bottle opener. Oh, and I'm helping somebody fund their dreams. Great.

Breweries with business plans don't need kick starters. Breweries who can't attract capital any way except kickstarter should not be in business, simple as that. If they can't sell their business plan to a bank/investors/etc. how are they planning on selling their beer to a distributor or on/off premise accounts?

 

I think I know the brewery you are talking about and I didn't fund them because I never had their beer. I would not want to fund a brewery without knowing I am actually funding somebody who is going to make good beer. Atlanta has enough "meh" breweries (although it is getting much better in the last couple of years with Orpheus, Wild Heaven in Decatur now, Red Brick's Brick Mason series, BHB, Three Taverns, and CC in Athens). Having beers by the brewery I think you are talking about makes me glad I didn't fund them. Outside of their English Barley Wine they just seem to make a bunch of average IPAs.

 

In which states is it illegal? Recent legislation has actually promoted that companies be able to *only* provide product (and not a portion of dividends) to such crowdfunding investors. There are many, many breweries that provide product -- often in retail amounts that exceed the initial investment dollars -- as a reward for donations.

 

All of them. Selling alcohol without a license (assuming that at the kickstarter phase, the "brewery" isn't yet licensed). There's no verification that anybody is purchasing the right to buy alcohol via kickstarter. Many states don't allow you to discount alcohol, so if you sell to one customer at $10/2 pints, that better damn well be the price you charge when the taproom opens. There are other states where you can't sell beer in a taproom. Many states you can't pre-sell alcohol (you can't sell a card that says "buy this punch card for $10 and you get 2 pints" which is exactly what this does.

Granted, this hasn't been tested in court yet (and may never) but...

 

Kickstarter. Never will I buy into such a thing. How can such a thing be governed. Honor system for people who are taking the low road? Nope