BrewDog Moves Over to Crowdcube with Combo Debt / Equity Crowdfunding Offer

BrewDog Beers

BrewDog and its “Equity for Punks” crowdfunding offer is now listed on Crowdcube in a “first” combined debt and equity capital raise.  The offer is marketed as the “Worlds Biggest [funding] Round”. According to Crowdcube, investors may purchase 2 shares of BrewDog stock for £95 or purchase a bond for £500 with a fixed 6.5% annual rate of return.  Both offers have been married with perks like discounts on beer.

BrewDog Founders Live the DreamThis is not the first time BrewDog has offered equity online and the company is, in fact, a trailblazer in the equity crowdfunding space.  Started out of the back of a van by two guys and dog,  BrewDog has had an epic journey going from zero to becoming the largest independent brewer in Scotland.  The craft brewer is now recognized globally for its high-quality product and today employs over 350 people, exports beer to over 50 countries and operates over 32 branded bars with more to come.  Operating profits came in at £3.9 million in 2014. BrewDog announced it was raising capital directly online this past April.  The 4th Equity for Punks target raise is for a solid £25 million.  The offer quickly raised £5 million within the first 20 days but since then funding has slowed.  According to BrewDog funding now stands at around £8 million.

The new capital will be used to build a bigger brewery – something that will create 130 permanent jobs. Additionally BrewDog is looking to expand its international presence including its first brewery located outside of Scotland.  BrewDog recently announced it had acquired land in Ohio in the US for this purpose.

BrewDog Fat CatsAfter BrewDog announced its offer in this past spring there was a bit of glitch as the company acknowledged there were errors in its documentation and was now not considered a “UKLA Approved Investment”. Some equity crowdfunding industry people were of the opinion that offers should only take place on FCA registered portals.  The UKCFA referenced the BrewDog offer in a statement this past May;

“The UK Crowdfunding Association exists to support and promote crowdfunding, which includes giving businesses the opportunity to use platforms to source finance from their fans, friends and other investors. However, we believe that this should be conducted by FCA-authorised crowdfunding platforms, which are subject to uniform standards of disclosure, transparency and treating customers fairly. Investors can then be assured they are receiving clear and correct information that has been approved by the platform, and that the appropriateness of the investment has been considered. We will be engaging with the FCA in this regard, but in the meantime urge investors to consider the regulatory status of a platform before making an investment.”

DogWired from BrewDogWith the offer now being hosted by Crowdcube these questions should not be laid to rest.

All Street, a research entity that follows equity crowdfunding offers in the UK, published an opinion on the offer and associated valuation.  Business Insider UK said at the time that All Street’s statement “destroys BrewDog’s ‘punk’ stock offering”.  A closer review of the All Street statement indicated it was not quite so definitive.  Adding a bond offer, with a fixed rate of return, should assist in the funding round.  James Watt, BrewDog co-founder commented on the All Street statement;

“We are confident about the valuation for our company,” he said. “We had people complaining about the valuation in Equity for Punks I, II and III, but we have justified that.”

Today BrewDog has over 30,000 individual investors, most small retail types who are also ardent brand ambassadors. In many ways, BrewDog is a perfect example of using the internet to marry fans, ownership and advocacy for a consumer-facing product. BrewDog is continuing “its plans for world domination” as it asks the public to help fund the expansion of its brewery in “Scotland and bars all over the planet”.

Great pitch video below…


 

#DontMakeUsDoThis – The BrewDog Bond from BrewDog on Vimeo.


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