Earlier this month, BrewDog, once a leading example of the securities crowdfunding sector, was sold as it entered administration.
BrewDog leveraged multiple platforms to raise growth capital for the craft brewery that once had a valuation measured in the billions. When expanding into the US, BrewDog used the Reg A exemption to raise funding from US investors while building pubs (first in Columbus, Ohio) to continue its grassroots business approach.
James Watt, BrewDog co-founder, posted on LinkedIn that he was “heartbroken for all of our brilliant equity punks who did not get the return on their investment they wanted. And heartbroken to have dedicated the best 20 years of my life to something that ultimately did not have the ending we all wished for.”
Watt shared that part of the problem was that they expanded too quickly and diversified too aggressively – things he would do differently today.
Commentators on the post questioned Watt’s sincerity, asking :
“Why didn’t you make sure that the equity punks got a payout at the same time that you did if you cared so passionately about them getting a return on their ‘investment’?”
BrewDog’s 38 pubs across the UK and Ireland are now shuttered. Almost 500 people have lost their jobs.
Tillray Brands, a US-based firm, has secured many of the assets for a mere $33 million. Tilray has since acquired pubs and other properties in the US. For the time being, the brand will continue.
The BrewDog odyssey highlights the challenges faced by any early-stage firm as it seeks to balance growth with profitability. In this case, investors, especially retail ones, ended up receiving little, underscoring the risk affiliated with a small, private firm.
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