Nearly a year after launching its “Equity for Punks” USA crowdfunding scheme, Scottish craft beer company BrewDog PLC has announced that it raised $7 million, falling considerably short of a stated $50 million target.
Tapping into contributions from nearly 9,000 investors, the $7 million will be used to to help pay for BrewDog USA’s new 100,000 sq. ft. production brewery in Columbus, Ohio, and for the continued expansion of its products throughout the U.S. market.
BrewDog, which hosted the campaign on the Bankroll Ventures platform, had originally hoped to break its own equity crowdfunding world record of $35 million, however.
According to an offering circular at the time the crowdfunding campaign was launched, BrewDog estimated that a majority of the proceeds would be put toward brewery construction, equipment purchases, employee salaries, working capital and the opening of various BrewDog pubs throughout the U.S.
In last week’s blog post announcing the $7 million raise, BrewDog did not disclose how it plans to disburse the funds.
The company opened its “DogTap” taproom in February and began shipping beer from the Columbus production facility in July. A separate brewpub in the Franklinton area of Columbus is scheduled to open in 2018.
The crowdfunding campaign — permitted by the Securities and Exchange Commission under regulation A+ Title IV of the JOBS Act, which allows both accredited and non-accredited investors to purchase shares in private businesses — garnered a significant amount of early interest and BrewDog raised $1 million within the first three days of its launch.
But as contributions slowed, the company turned to a number of stunts — including a plan to gamble investors’ money at a roulette table and a promise to open brewpubs in American cities where at least 500 people invested — in an attempt to build additional interest in the project.
In the final days of the campaign, BrewDog secured $500,000 over a 24-hour period, the company said, adding that 2,000 new shareholders invested during the month of July alone.
“Our shareholders are the beating heart of our business,” BrewDog wrote on its blog. “Along with our fanatical devotion to the hop, they are the reason we do what we do every single day, and the reason we strive to produce amazing beer with a soul and a purpose.”
This marks the fifth time that BrewDog has turned to crowdfunding to raise money. In its four international funding rounds, BrewDog has raised:
- £750,000 during 2009’s Equity for Punks I
- £2.2 million during 2011’s Equity for Punks II
- £2.2 million during 2013’s Equity for Punks III
- £19 million during 2015’s Equity for Punks IV
To date, BrewDog’s crowdfunding campaigns have raised a total of $40.88 million from about 55,000 shareholders, according to Crowdfund Insider.
Crowdfunding isn’t the only method BrewDog founders James Watt and Martin Dickie have used to raise capital, however. Earlier this year, BrewDog sold a 22 percent stake to San Francisco-based private equity firm TSG Consumer Partners, which also has investments in Pabst and Sweetwater Brewing. The $265 million deal valued the company at about $1.2 billion.
At the time of the sale, BrewDog founder James Watt said $124 million would be reinvested into continued expansions in the U.S. and abroad. The rest of the proceeds would be allocated for “early shareholder liquidity.”
For their part, Watt and Dickie reportedly netted more than $100 million in the deal. Watt maintained about 25 percent of BrewDog’s stock, while Dickie holds about 22 percent.