Your a fledgeling craft brewery (homebrewer), 3 investors approach you...

Discussion in 'Australia & New Zealand' started by GrahamYallop, Jun 21, 2012.

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  1. GrahamYallop

    GrahamYallop Initiate (0) May 26, 2012

    Craft brewer (homebrewer)

    Investor A has a 7 million dollars (700,000) to invest, but wants you to spend 5 million ($500,000) on advertising and 2 million ($200,000) on capital expansion. Investor wants 20% of company in return.

    Investor B has 3 million ($300,000) but wants you to invest it all on capital. Investor wants 35% of company in return.

    Investor C has $8 million dollars ($800,000) and wants you to spend $3 million ($300,000) on advertising and $5 million ($500,000) on capital, but wants 55% of company in return. Also wants you to focus 50% of product line/capacity on industrial lager.

    Which would you choose?
  2. MrKennedy

    MrKennedy Savant (903) Dec 29, 2006 Australia
    Beer Trader

    An extra zero

    The capitalist inside of me says A and then bail before the ad money goes.

    The realist says that much advertising spend could almost make me see a floor in the Fairfax stock price.

    The craft beer side says B.

    Very hard to compete in the bottled space unless you have high quality product. Advertising money doesn't equal tap fonts
  3. scmorgan

    scmorgan Initiate (0) Apr 5, 2005 Australia

    I'd back the guy that can sell a beer each and every time ...
  4. MordeciaFunk

    MordeciaFunk Initiate (0) Feb 14, 2012 Australia

    All of them. Don't tell either one that I'm dealing with the others. I take all the money. I then fly to Japan (no extradition treaty) and laugh and drink my a_se off while they try and sort out the 110% of a company I've left them with.

    Then with my 19 million dollars I would:

    send Lukie and Mr Perthbelgianbeers lambic care packs
    send the Sydney boys (Mr K, Mr Danieelol, Mr Mulder, Mr Spicelab, Mr Heygeebee etc) delicious wacky Japanese beer packs
    Mr Parrotshake I would fly over because he always seems to cook a good breakfast for his beers and I'm sure his gf would appreciate the holiday
    Mr ADZA, Mr scmorgan, Mr ALEBOY, Mr Joecast, Mr dgilks, Mr Hopswiller, Mr Hawthorne, Mr Gulden, Mr Deathevocation, Mr Jbowers and Mr Sinkas I would say PM me because I dont really know what you want but, hey, I've got 19m to get rid of, tell me what you want and I will get it.

    For you Mr Yallop I would give nothing. Firstly for the question, in which you seem to be trying to set us all up as sell-outs and hopefully pick apart the dichotomy between our views on Creatures and what we would do ourselves
    and secondly because of the phrase 'I warned you, you didnt listen, die arseholes.'

    That wasn't polite.
    heygeebee, danieelol and joecast like this.
  5. MordeciaFunk

    MordeciaFunk Initiate (0) Feb 14, 2012 Australia

    My apologies in advance if it really is a legitimate question though.
    hawthorne00 likes this.
  6. scmorgan

    scmorgan Initiate (0) Apr 5, 2005 Australia

    Just about to print off your post for the pool room ... was most awesome ...
  7. danieelol

    danieelol Savant (957) Jun 15, 2010 Australia

    I think you have been watching too many crappy shows about self-proclaimed "entrepreneurs"

    "'I warned you, you didnt listen, die arseholes.'"

    Did he actually say that? lol.
  8. heygeebee

    heygeebee Poo-Bah (1,576) Aug 6, 2010 Australia

    erm, yes he did, but Cricket Australia threatened to cancel his Twitter account as well, so he deleted the post....
  9. dgilks

    dgilks Initiate (0) Jul 14, 2008 Australia

    Love it MordeciaFunk.

    In response to the original question, I'd take the first. The 5m in advertising should create enough demand to support a reasonable price and then sufficient profits to expand the brewery beyond what the initial 2m creates. On the other hand, there is no way I'd give up massive chunks of my equity for nothing more than cash, especially if it led to someone else getting a controlling stake.
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