Many credit the development of equity crowd funding to beer. It wasn’t that some guys had consumed too much and came up with an alcohol-induced idea to raise funds in a way that had never been done before. It was the sale of shares in a beer company that caught the eye of the SEC which, when fanned by the Wall Street Journal, became the catalyst for the inertia of crowd funding worldwide. Today, things have gone full circle as project creators use crowd funding for their beer-related initiatives, and project supporters are enjoying some wonderful rewards.
The move to investment crowd funding came in 2008, when American beer company Pabst Blue Ribbon put itself up for sale for $300million. One clever social media marketer, Michael Migliozzi, thought it was the chance to run a brilliant social experiment, and tweeted, “Why don’t we crowdsource this?” Five days later, he launched BuyABeerCompany.com. Within two months, he had not only raised $210 million in pledges, but he had also raised the attention of the SEC. In March 2010, the SEC contacted Migliozzi about the “joke” which they saw as less than funny, because the investors funding the Pabst buyout attempt were regular investors, not accredited investors, and at the time, US law prohibited regular investors from participating in these kinds of deals. But in addition to the social experiment getting the attention of the SEC, the Pabst buyout attempt got the attention of the Wall Street Journal, and the publication wrote an article about the online buyout attempt soon after. And with this, the spotlight had been cast on investment crowd funding, giving it the initial impetus that it needed to now get it into law in the USA.
Today, crowd funding is used worldwide, with the pledge model being the most commonly and widely used. And crowd funding seems to have stayed loyal to its roots, with beer-related project now cropping up in various forms around the world.
US Startup, Zephyr, is currently at 10% of its $15,000 goal to jumpstart operations. It hopes to commence operations around March / April 2014, and has turned to the crowd to fund their launch. Zephyr has leveraged off the well sought after rewards to inspire the crowd to pledge, and their perks include: a Zephyr pint glass, a sticker, a magnet and a free pint for $20; a limited edition T-shirt and a free pint of beer every day for an entire year for $300; and, for larger contributors, the company is giving the option to have their very own beer on tap in Denver, as the buyer and a friend can join Zephyr Brewing Co. on a brew day to participate in a 7-barrel brew. This campaign is proving absolute heaven for beer enthusiasts, who are pledging to get great rewards at wonderful prices, as well as to be part of the local community of beer connoisseurs who will share in something unique and special.
Half a world away, U-Brew It has embarked on a similar campaign, but this well established franchised company is hoping to raise $60,000 to take its company to the next level by exploring new marketing opportunities. They too have leveraged off beer drinkers’ desire to get their hands on a cool, refreshing ale, whether it be through one of their club memberships, during a tour of their microbrewery, or some of their great product that replicates the taste of some of the big brands (at a fraction of the price for those who pledge). The project supporters are also able to benefit from getting the rewards, not once, but over a number of years, just for making a single pledge to this campaign. U-Brew It emphasises the community-mindedness around the micro-brewing concept, and promote their beer as a healthier alternative to the mass-produced, commercial ranges that most people are more familiar with. They claim to also have a reasonably priced (and reasonably tasty) gluten-free beer for coeliac beer lovers.
So it seems crowd funding has come full circle, and continues to return to its roots in beer. And at Christmastime, whether in the scorching Aussie summer or the cold northern winter, it is the time when a nice cold (crowdfunded) beer is just what the doctor ordered.